Gas Storage

Fact Sheet
 

Gas Storage

Background

The ability to store and retrieve natural gas increases the reliability of gas service. Access to storage allows individual gas buyers to acquire lower-cost supplies on the spot market during off-peak periods(such as the summer months) and store the gas in locations near end-users during periods of peak demand (such as the winter months). Storage can also compensate for temporary disruptions in natural gas production. Natural gas can be stored underground in several types of facilities, including salt caverns, depleted aquifers, and depleted oil and gas reservoirs. On average, 15 20 percent of natural gas consumed during the five-month winter heating season comes from underground storage. On a given winter day, 50 percent or more of gas supplied to customers may come from underground storage. As significant holders of storage capacity, natural gas utilities are changing the way they use the supply asset, and continue to improve their storage practices to be more competitive. For example, many utilities use financial tools to hedge summer injections and minimize storage refill costs. In addition, storage capacity is increasingly viewed as an asset that requires critical economic management in order to maximize its value.

AGA Viewpoint:

Approximately 420 natural gas storage fields operate in the United States. Underground storage is a critical link to supplying consumers with reliable, affordable natural gas, particularly during periods of peak demand. Underground storage also links critical new infrastructure development, such as liquefied natural gas (LNG) terminals, to natural gas customers. It acts as a repository of supply between the times gas is imported and when it is required for consumption. AGA supports the market based growth of this key gas infrastructure.

Additional Information: Energy Information Administration (www.eia.doe.gov)

AGA Contact: Chris McGill, (202) 824-7132, cmcgill@aga.org

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