Natural gas storage


is a commodity that can be stored for an indefinite period of time in natural gas storage facilities for later consumption.

Usage

Gas storage is principally used to meet load variations. Gas is injected into storage during periods of low demand and withdrawn from storage during periods of peak demand. It is also used for a variety of secondary purposes, including:
  • Balancing the flow in pipeline systems. This is performed by mainline transmission pipeline companies to maintain operational integrity of the pipelines, by ensuring that the pipeline pressures are kept within design parameters.
  • Maintaining contractual balance. Shippers use stored gas to maintain the volume they deliver to the pipeline system and the volume they withdraw. Without access to such storage facilities, any imbalance situation would result in a hefty penalty.
  • Leveling production over periods of fluctuating demand. Producers use storage to store any gas that is not immediately marketable, typically over the summer when demand is low and deliver it in the winter months when the demand is high.
  • Market speculation. Producers and marketers use gas storage as a speculative tool, storing gas when they believe that prices will increase in the future and then selling it when it does reach those levels.
  • Insuring against any unforeseen accidents. Gas storage can be used as an insurance that may affect either production or delivery of natural gas. These may include natural factors such as hurricanes, or malfunction of production or distribution systems.
  • Meeting regulatory obligations. Gas storage ensures to some extent the reliability of gas supply to the consumer at the lowest cost, as required by the regulatory body. This is why the regulatory body monitors storage inventory levels.
  • Reducing price volatility. Gas storage ensures commodity liquidity at the market centers. This helps contain natural gas price volatility and uncertainty.
  • Offsetting changes in natural gas demands. Gas storage facilities are gaining more importance due to changes in natural gas demands. First, traditional supplies that once met the winter peak demand are now unable to keep pace. Second, there is a growing summer peak demand on natural gas, due to electric generation via gas fired power plants.
Image:UndergroundGasStorage 10.JPG|thumb|center|Datasource.

Measures and definitions

A number of metrics are used to define and measure the volume of an underground storage facility:
  • Total gas storage capacity: It is the maximum volume of natural gas that can be stored at the storage facility. It is determined by several physical factors such as the reservoir volume, and also on the operating procedures and engineering methods used.
  • Total gas in storage: It is the total volume of gas in storage at the facility at a particular time.
  • Base gas : It is the volume of gas that is intended as permanent inventory in a storage reservoir to maintain adequate pressure and deliverability rates throughout the withdrawal season.
  • Working gas capacity: It is the total gas storage capacity minus the base gas.
  • Working gas: It is the total gas in storage minus the base gas. Working gas is the volume of gas available to the market place at a particular time.
  • Physically unrecoverable gas: The amount of gas that becomes permanently embedded in the formation of the storage facility and that can never be extracted.
  • Cycling rate: It is the average number of times a reservoir’s working gas volume can be turned over during a specific period of time. Typically the period of time used is one year.
  • Deliverability: It is a measure of the amount of gas that can be delivered from a storage facility on a daily basis. It is also referred to as the deliverability rate, withdrawal rate, or withdrawal capacity and is usually expressed in terms of millions of cubic feet of gas per day that can be delivered.
  • Injection capacity : It is the amount of gas that can be injected into a storage facility on a daily basis. It can be thought of as the complement of the deliverability. Injection rate is also typically measured in millions of cubic feet of gas that can be delivered per day.

The measurements above are not fixed for a given storage facility. For example, deliverability depends on several factors including the amount of gas in the reservoir and the pressure etc. Generally, a storage facility’s deliverability rate varies directly with the total amount of gas in the reservoir. It is at its highest when the reservoir is full and declines as gas is withdrawn. The injection capacity of a storage facility is also variable and depends on factors similar to those that affect deliverability. The injection rate varies inversely with the total amount of gas in storage. It is at its highest when the reservoir is nearly empty and declines as more gas is injected. The storage facility operator may also change operational parameters. This would allow, for example, the storage capacity maximum to be increased, the withdrawal of base gas during very high demand or reclassifying base gas to working gas if technological advances or engineering procedures allow.
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Types

The most important type of gas storage is in underground reservoirs. There are three principal types — depleted gas reservoirs, aquifer reservoirs and salt cavern reservoirs. Each of these types has distinct physical and economic characteristics which govern the suitability of a particular type of storage type for a given application.
Image:UndergroundGasStorage 8.gif|frame|Natural gas is stored in underground salt formations, aquifer reservoirs and depleted reservoirs.

Depleted gas reservoir

These are the most prominent and common form of underground storage of natural gas. They are the reservoir formations of natural gas fields that have produced all or part of their economically recoverable gas. The depleted reservoir formation should be readily capable of holding sufficient volumes of injected natural gas in the pore space between grains, of storing and delivering natural gas at sufficient economic rates and be contained so that natural gas cannot migrate into other formations and be lost. In addition the rock should be capable of withstanding the repeated cycle of an increase in pressure when natural gas is injected into the reservoir and in reverse the drop in pressure when natural gas is produced.
Using such a facility that meets the above criteria is economically attractive because it allows the re-use, with suitable modification, of the extraction and distribution infrastructure remaining from the productive life of the gas field which reduces the start-up costs. Depleted reservoirs are also attractive because their geological and physical characteristics have already been studied by geologists and petroleum engineers and are usually well known. Consequently, depleted reservoirs are generally the cheapest and easiest to develop, operate, and maintain of the three types of underground storage.
In order to maintain working pressures in depleted reservoirs, about 50 percent of the natural gas in the formation must be kept as cushion gas. However, since depleted reservoirs were previously filled with natural gas and hydrocarbons, they do not require the injection of gas that will become physically unrecoverable as this is already present in the formation. This provides a further economic boost for this type of facility, particularly when the cost of gas is high. Typically, these facilities are operated on a single annual cycle; gas is injected during the off-peak summer months and withdrawn during the winter months of peak demand.
A number of factors determine whether or not a depleted gas field will make an economically viable storage facility:
  • The reservoir must be of sufficient quality in terms of porosity and permeability to allow storage and production to meet demand as required;
  • Natural gas must be contained by effective seals otherwise there will be lost volumes that cannot be recovered;
  • The depleted reservoir and field infrastructure must be close to gas markets;
  • The existing infrastructure must be suitable for retrofitting the equipment to inject and produce gas at the necessary pressures and rates;
Image:NaturalGasStorage 3.JPG|frame|center|Datasource.

Aquifer reservoir

s are underground, porous and permeable rock formations that act as natural water reservoirs. In some cases they can be used for natural gas storage. Usually these facilities are operated on a single annual cycle as with depleted reservoirs. The geological and physical characteristics of aquifer formation are not known ahead of time and a significant investment has to go into investigating these and evaluating the aquifer’s suitability for natural gas storage.
If the aquifer is suitable, all of the associated infrastructure must be developed from scratch, increasing the development costs compared to depleted reservoirs. This includes installation of wells, extraction equipment, pipelines, dehydration facilities, and possibly compression equipment. Since the aquifer initially contains water there is little or no naturally occurring gas in the formation and of the gas injected some will be physically unrecoverable. As a result, aquifer storage typically requires significantly more cushion gas than depleted reservoirs; up to 80% of the total gas volume. Most aquifer storage facilities were developed when the price of natural gas was low, meaning this cushion gas was inexpensive to sacrifice. With rising gas prices aquifer storage becomes more expensive to develop.
A consequence of the above factors is that developing an aquifer storage facility is usually time consuming and expensive. Aquifers are generally the least desirable and most expensive type of natural gas storage facility.
Image:NaturalGasStorage.JPG|frame|center|Total Deliverability from Natural Gas Storage by Type of Facility, 1998, 2005, 2008.