In the natural gas industry, capacity measures the capability of a well, processing plant, pipeline, storage facility, or LNG facility to provide service. Capacity is typically defined in units of volume per day, although in some cases energy value per day is used. For instance, the capacity of a pipeline might be described in millions of cubic feet per day (MMcf/d) or in decatherms per day (Dth/d).
Capacity is used to define the available space on a gas pipeline. When a new pipeline is constructed, a design capacity is specified. This capacity is not a “hard” number because the pipeline’s capability to transport gas will vary based on operating and weather conditions. The design capacity is based on several assumptions. Pipeline regulators typically use engineering calculations to determine the defined firm capacity of a given pipeline. Firm capacity is the amount of capacity that is reasonably expected to be always available under normal operating conditions. Because pipeline capacity depends on environmental conditions (for instance, compressors can compress higher volumes of gas in cold conditions) the regulator may assign different seasonal firm capacity. Additional capability that is available only part of the time is designated as interruptible capacity.
The specification of a pipeline’s design capacity is important because it sets the amount of transport capacity that can be offered under firm transport (FT) agreements. Because capacity under firm contracts is expected to be available on almost all days, the pipeline cannot sign contracts for more firm capacity than has been authorized by the pipeline’s regulator. The pipeline may also sign interruptible transport (IT) agreements, but these assume no expectation on how often the capacity will be available.