Busan LNG Reconciliation: Keep the Units Visible

Key takeaways

• Preserve the unit attached to every quantity.
• Identify the contractual invoicing basis before checking the amount payable.
• Obtain the relevant qualified conversion evidence where needed.
• Keep quantity, price and product-acceptance questions separate.

Establish the actual LNG transaction

MOF reported an LNG bunkering demonstration at Busan New Port in August 2024. MOF historical report

That historical context does not determine the measurement or invoicing terms of a later purchase. Use the actual accepted agreement and records for the proposed supply rather than assuming that all LNG transactions share one commercial basis.

For a current transaction, the unit reconciliation is not provided; obtain current verified information. Record each relevant quantity and unit, accepted invoicing basis, qualified supporting calculation, document references and unresolved differences.

Read the units before interpreting the difference

A nomination may describe the required parcel on one basis while the final invoice uses another agreed basis. A numerical difference alone does not establish an overdelivery, shortage or incorrect invoice.

Identify what each figure measures and the purpose of the document containing it. A planning estimate, measured delivery quantity and final billable amount are not interchangeable merely because the spreadsheet gives them the same column heading.

Do not remove units to simplify the report. A clean-looking table of bare numbers can make incompatible quantities appear directly comparable and encourage a false conclusion.

Establish the accepted invoicing mechanism

The purchase should define how the invoice quantity is determined and which supporting evidence supplies its inputs. Procurement needs a traceable explanation of that mechanism, not instructions for performing technical measurement.

Ask the responsible qualified reviewer to confirm that any conversion or derived quantity uses the appropriate transaction-specific basis. Do not select a convenient internet conversion or a value from an earlier parcel merely to make the current invoice reconcile.

If the agreement leaves the basis unclear, obtain clarification and appropriate contractual review. An internal spreadsheet formula cannot resolve a substantive ambiguity in what the parties agreed to buy and pay for.

A unit-reconciliation table

Fictional case: unlike units create an apparent shortage

A fictional buyer nominates an LNG parcel using a mass-based planning requirement. The accepted purchase provides an energy-based invoicing mechanism supported by specified evidence. After delivery, the invoice reviewer imports the energy figure into a column previously used for tonnes.

The comparison no longer has a coherent meaning, but the spreadsheet flags a large variance. The reviewer initially asks the supplier to correct the quantity.

The responsible team instead restores the units, connects the qualified calculation to its delivery evidence and checks the actual contractual invoicing basis. Any remaining disagreement can then be investigated precisely. The correction does not assume the invoice is right; it removes a false comparison so the real question becomes visible.

Check the price denominator as carefully as the quantity

A unit price should state the currency and the quantity unit to which it applies. Multiplying an energy-based price by a mass figure without the applicable basis does not produce a valid product total.

The same care is needed when comparing the purchase with a previous invoice. A lower-looking unit price may simply use another denominator. Preserve the full basis before describing a saving or increase.

Where finance wants a common reporting measure, obtain an authorised and clearly labelled analytical conversion. Keep that reporting calculation distinct from the supplier's contractual invoice so later reviewers can reconstruct both.

Do not use a quantity reconciliation to decide product suitability

A mathematically consistent invoice does not establish that the delivered product meets every accepted quality requirement. Product acceptance needs the relevant evidence and qualified review on its own basis.

Conversely, an accepted product assessment does not prove that the billing quantity and price calculation are correct. These checks support different conclusions and should not replace each other.

When the parties agree a financial adjustment, identify whether it changes quantity, price or another commercial item. Do not rewrite the physical delivery quantity solely because a credit changes the net payable amount.

Close only the question the evidence resolves

A final reconciliation should state which quantities and calculations are accepted and which issues remain open. If supporting evidence is missing, leave the relevant conclusion pending rather than inserting an assumed value.

Preserve the qualified reviewer and source references for derived figures. The buying desk can then explain the transaction without claiming technical authority it does not hold.

Common mistakes

Avoid comparing bare numbers with different units, importing an old conversion basis and multiplying a price by an incompatible quantity. Other errors include treating arithmetic consistency as product acceptance or using a financial credit to infer a physical shortage. Retain the transaction's actual measurement and billing boundaries.

Where Zeaclub fits

Zeaclub provides a multi-party shared workspace for owners, charterers, brokers and port agents.

Zeaclub offers digitalised procedures across the voyage workflow.

Explore Zeaclub

Explore Zeaclub