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Gas Imbalance
Practical Law Glossary Item 2-525-5066 (Approx. 2 pages)
Glossary
Gas Imbalance
In the context of the oil and gas industry, this occurs when there is a discrepancy between the volume of gas received and delivered. There are three kinds of imbalances:
- Producer and Producer. When a producer sells or uses a volume of natural gas in excess of its gross working interest.
- Pipeline and Pipeline. When a pipeline receives a volume of natural gas and redelivers a larger or smaller volume of natural gas under the terms of a transportation agreement.
- Producer and Pipeline. When a producer delivers a volume of natural gas that is larger or smaller than the volume of natural gas that the pipeline redelivers for the producer's account to another party.
For more information on gas imbalances including how they can occur, how they are resolved, and how they are dealt with financing documents, see Practice Notes, Natural Gas Balancing: Overview and What's Market: Credit Agreements in the Oil & Gas Industry.