LNG cargoes: reconcile heel, boil-off and transferred energy
An LNG cargo can lose liquid volume during a voyage while its remaining density and calorific value also change. Tank volume alone therefore cannot establish transferred energy or the party bearing a commercial loss. Research needs a cargo inventory bridge and a separate transfer-energy calculation, each tied to the correct measurement window.
The deliverable is a loading-to-discharge ledger that records liquid, retained heel, gas corrections and contract responsibility. The numerical case is fictional and does not describe the vessel in the cited charter. It is not guidance on managing boil-off, tank conditions or vessel operations.
Locate measurement and contract evidence separately
OIML’s article on harmonized LNG custody-transfer measurements explains the roles of liquid volume, density and gross calorific value in its Large scale LNG custody transfer section. The same section identifies displaced-gas and applicable engine-room gas terms. Use it to identify required measurements, not to assume one formula’s signs apply unchanged to every loading or unloading contract.
The Stabilis-filed Seaspan Garibaldi charter, Exhibit 10.16, clause 25 Cargo and Heel Measurement, calls for before-and-after tank measurement and custody-transfer reports. Clause 24 and Appendix A discuss boil-off with specific conditions and qualifications. These are provisions of that particular charter, not universal terms governing every LNG cargo.
For an actual transaction obtain the sale contract’s delivery point, custody-transfer report, sampling basis, tank-table corrections and the relevant charter allocation. The buyer-seller energy settlement and the owner-charterer allocation can concern different parties and clocks. One should not be used as a substitute for the other.
Rebuild the fictional loading case
Assume a newly defined loaded parcel of 100,000 cubic metres, density 450 kilograms per cubic metre and gross calorific value fifty megajoules per kilogram. There is no unallocated opening heel in this loading figure. Loaded mass is 45,000,000 kilograms, and gross liquid energy is 2,250,000 gigajoules after dividing megajoules by one thousand.
If an actual loading record is a tank inventory after loading rather than the newly added parcel, subtract the measured opening inventory on a compatible basis before calling it cargo received. Otherwise retained heel can be counted as a new purchase each voyage.
At arrival, assume the measured pre-discharge inventory is 96,000 cubic metres, now at density 455 kilograms per cubic metre and calorific value 49.8 megajoules per kilogram. After discharge, two thousand cubic metres remain as heel. Assume both arrival readings use compatible tank corrections and the same stated density for this simplified transfer interval.
Net liquid discharged is 96,000 − 2,000 = 94,000 cubic metres. Its mass is 94,000 × 455 = 42,770,000 kilograms. Liquid energy transferred before gas adjustments is 42,770,000 × 49.8 ÷ 1,000 = 2,129,946 gigajoules.
| Measurement | Quantity | Role |
|---|---|---|
| Loaded parcel | 100,000 cubic metres | Defined initial addition |
| Arrival liquid inventory | 96,000 cubic metres | Before discharge |
| Retained heel | 2,000 cubic metres | After discharge |
| Liquid discharged | 94,000 cubic metres | Difference across transfer |
| Liquid transfer energy | 2,129,946 gigajoules | Matching density and calorific value |
Using the loading density and calorific value for the discharged volume would instead give 2,115,000 gigajoules. The difference of 14,946 comes from the assumed property basis. It is not additional physical cargo created by the worksheet. Obtain the applicable measured composition and averaging method before choosing a value for settlement.
Add only transfer-window gas adjustments
Assume a fictional settlement convention explicitly deducts two thousand gigajoules of displaced-gas energy and five hundred gigajoules of applicable transfer-window engine-room gas. Under those invented signs and boundaries, settled energy is 2,129,946 − 2,000 − 500 = 2,127,446 gigajoules.
This convention is an example, not a reproduction of a universal GIIGNL rule or the cited charter’s invoice. Actual signs, ownership and applicability must be transcribed from the transaction documents. A gas term already reflected in a measured net quantity should not be deducted again merely because another report also labels it boil-off.
Voyage gas consumption and gas used during the custody-transfer window are different periods. Arrival inventory already reflects the voyage’s physical outcome. Subtracting the entire voyage’s estimated boil-off again from 94,000 liquid cubic metres double counts that reduction. Reconcile the dates and measurement basis before combining any gas ledger with the soundings.
Reconcile mass without calling every difference venting
The arrival liquid mass is 96,000 × 455 = 43,680,000 kilograms, compared with 45,000,000 initially loaded. The difference is 1,320,000 kilograms in this simplified liquid inventory comparison. The volume decline alone, four thousand cubic metres, cannot be assigned a mass using two incompatible densities without stating the conversion.
That liquid-inventory difference is not automatically atmospheric emissions. Gas may have been consumed as fuel, handled through other recorded arrangements or affected by measurement and inventory boundaries. Obtain those records before assigning the difference. The worksheet does not decide the physical destination of a residual simply because its title includes boil-off.
Retained heel is also inventory remaining aboard, not automatically a loss. Record who owns it, whether it is carried forward and how delivery or redelivery is priced. If the next voyage’s loading report includes that same heel, connect the opening balance rather than count it as a second purchase.
Test a commercial boundary
Suppose the buyer pays on measured discharge energy but a charter claim uses a warranted boil-off rate subject to defined exclusions. A lower discharge-energy result does not by itself establish a valid charter deduction. The claim requires the applicable performance period, warranty basis, exclusions and evidence of responsibility in that contract.
The reverse is also possible: a charter adjustment may change hire while the sale invoice still follows measured transfer energy. Keep cargo sales, retained inventory and hire adjustments on separate lines. Do not treat a disclosed physical difference as an automatic dollar-for-dollar earnings loss to whichever listed company appears in the documents.
Use the transfer verification sheet
| Input | Obtain | Check |
|---|---|---|
| Liquid volumes | Before/after custody-transfer reports | Loading parcel versus onboard stock |
| Heel | Opening, arrival and closing records | Ownership and carryforward, no double purchase |
| Properties | Matched density and calorific-value results | Composition, units and time window |
| Gas terms | Metered or agreed calculation records | Sign, interval and no duplicate deduction |
| Physical changes | Voyage inventory and gas disposition | Liquid reduction not automatically vented gas |
| Commercial allocation | Sale and charter clauses | Delivery point and parties kept separate |
When reports conflict, compare gross versus net volume, tank correction, property dates, energy units and loading versus discharge conventions. Preserve a residual and request the missing transfer report rather than select the density that creates the preferred revenue result.
If properties or gas terms are unavailable, report a conditional liquid-energy range and identify the absent measurement. Do not fill missing contract clauses with the illustrative assumptions. Measurement uncertainty and contractual responsibility are different uncertainties and need separate worksheet cells.
Update with final custody-transfer certificates, composition revisions, heel settlement, voyage gas records and resolved charter adjustments. The conclusion should reconcile what physically changed with what was measured at delivery, and then state which commercial allocation is actually supported by the transaction documents.
Preserve tank-level properties and document language
If the transferred liquid comes from tanks with different measured properties, calculate each tank’s volume times its matched density and calorific value before summing, unless a supported composite measurement supplies the correct aggregate basis. Averaging densities and calorific values separately without weights need not reproduce total energy.
Keep units alongside the property certificate. A calorific value per kilogram differs from one per cubic metre; gross and net calorific values also need compatible definitions. More digits in a worksheet do not resolve a missing sampling basis or an outdated certificate.
Contract vocabulary needs the same care. Do not equate a charter’s capitalized Delivery or Redelivery with a buyer’s cargo-discharge point without checking the definitions. The measurement time and allocation of heel may concern a different handover. Keep the document, clause, parties and clock in the evidence ledger so a correct cargo calculation is not attached to the wrong obligation. If a final certificate supersedes a provisional figure, preserve both and reconcile the property, volume and adjustment changes separately.
FAQ
Is all missing liquid volume an atmospheric emission?
No. The gas disposition and inventory basis require separate evidence.
Can voyage boil-off be subtracted again from measured discharge volume?
Not if that reduction is already reflected in the arrival and discharge measurements.