Cases Considered: Cargill Gas Marketing Ltd. v. Alberta Northeast Gas Limited, 2008 ABQB 59
PDF Version: Calculating the Price of Gas: Wet or Dry?
When gas is sold on the basis of its thermal or heating value it is necessary to provide a formula for converting delivered volumes (Mcf) into British thermal units or equivalent. And it makes a difference whether the formula uses an assumption of wet gas or dry gas. Wet gas will have a lower heating content than dry. But what happens if the formula prescribes the use of wet gas but in fact actual deliveries under the contract have always been dry gas? This was the issue before Justice T.F. McMahon in the present case.