LNG Chain

Explainer

Custody transfer: gauging, and who owns the error

Custody transfer is the measurement determining how much energy passed between seller and buyer at loading or discharge, calculated from tank level, liquid temperature and density, and a laboratory analysis of the cargo composition.

A cargo of LNG is worth somewhere in the tens of millions of dollars. What the buyer pays is decided by a measurement taken over a few hours at the ship’s manifold, and nobody measures the thing being sold directly.

Energy is calculated, not measured

LNG is sold by energy, in MMBtu, because energy is what the buyer wants. There is no instrument that reads energy off a tank.

So it is computed. Volume comes from the tank gauges. Density comes from an equation using the measured temperature and the analysed composition. Multiply the two for mass, multiply mass by the gross calorific value derived from the same composition, and you have energy. Then subtract: vapour displaced back to shore during loading, and gas consumed by the ship’s engines during discharge.

Every input to that chain carries uncertainty, and they accumulate.

What is measured

Level. Certified gauges, usually radar or float, read the liquid surface in each tank to a few millimetres. On a tank tens of metres across, a few millimetres is a substantial volume, which is why the gauges are calibrated instruments subject to survey rather than operational indicators.

Temperature. Sensors at several heights in each tank, because the liquid is not uniform. Temperature feeds the density calculation and confirms the cargo is at the expected condition.

Pressure and vapour temperature. Needed to account for the vapour space, which contains a real quantity of methane that has to be included on one side of the transaction or the other.

Composition. A sample is drawn and analysed by gas chromatograph. This is where the calorific value comes from, and it matters more than anything else: two cargoes of identical volume can differ by several per cent in energy depending on how much ethane and propane they carry.

Trim and list. The ship’s attitude changes the relationship between level and volume, so both are recorded and corrected for.

Where the error lives

Composition analysis is the largest single contributor to uncertainty in most transfers, because a small sample has to represent a very large volume, and sampling a boiling cryogenic liquid without changing it is genuinely hard. Sample vaporisers, line purging and repeat analyses all exist to manage that.

Level measurement is next, for the reason above: the tanks are enormous and the lever arm on any error is long.

Overall uncertainty typically lands within a fraction of a per cent. That sounds reassuring until it is multiplied out, at which point a routine measurement uncertainty is worth more than most people’s houses. Hence independent surveyors, witnessed procedures, and contracts that specify in advance how a disagreement is resolved.

Ageing complicates it

The cargo that arrives is not quite the cargo that loaded. Methane boils off preferentially through the voyage, so what remains is progressively heavier and higher in calorific value per unit volume — ageing, and on a long voyage it is measurable.

That is a real effect rather than a measurement artefact, and it is why loading and discharge are measured independently rather than one being inferred from the other. The difference between them is not error; it is boil-off consumed, boil-off vented or reliquefied, and composition change, and the contract has to say who bears each.

Why it appears on this site only indirectly

Custody transfer data is commercial, cargo by cargo, and none of it is public. Nothing here reports it.

Where it does surface is in the unit conventions. The reason this site quotes capacity in Mtpa and bcm/y together, states the conversion factors it assumes, and warns that two sources converting with different assumed compositions will disagree, is the same reason custody transfer needs a chromatograph: a cubic metre of LNG is not a fixed amount of energy, and any figure that implies it is has hidden an assumption.

Common questions

Each answer stands on its own.

What is measured during LNG custody transfer?
Liquid volume from tank gauges, liquid temperature from sensors at several heights, vapour temperature and pressure, and cargo composition from a gas chromatograph. Energy is then calculated rather than measured directly.
Why is LNG sold by energy rather than volume?
Because the energy in a cubic metre varies with composition by several per cent. A buyer is purchasing heat, not liquid, so the contract price is per MMBtu and the volume is only an input to the calculation.
How accurate is the measurement?
Typically within a fraction of a per cent overall. On a cargo worth tens of millions of dollars, even that fraction is a large number, which is why the procedures are so prescriptive and why both parties attend.
Who performs the measurement?
An independent surveyor, usually appointed jointly, working alongside ship and terminal staff. Both sides witness the gauging and sampling, and disputes are handled under procedures the contract sets out in advance.
What is a custody transfer measurement system?
The certified instrumentation aboard the vessel — level gauges, temperature sensors and pressure instruments — that has been calibrated and approved for use in commercial measurement rather than merely for operational monitoring.

Last reviewed 2026-09-07.