August 13th, 2020
Category Large Energy Storage Systems handbook
A number of technologies developed by the gas storage industry in the United States and Europe have potential application to CO2 sequestration. The most utilized method of storing natural gas in geologic formations is injection into
Develop better understanding of maximum delta temperature that casings can withstand without failure of cement or joints.
Improve corrosion management methods to enhance availability (especially bacterial control).
Develop new tools (e. g., logging) and techniques to verify integrity of casing strings.
Research improvements in deliverability by mechanical means such as new coil tubing tools.
Find new approach to handling produced water.
Develop cost-effective means to remove water at end of withdrawal season. Develop ways to delay or prevent "watering off...Read More
Gas storage technology development has been conducted continuously since the evolution of the first storage fields. Better understanding of reservoir
New North American Gas Storage Requirements
Source: Base case from At the Crossroads: Crisis or Opportunity for Natural Gas? Energy and Environmental Analysis Inc. With permission.
responses to gas storage conditions, mechanical is...Read More
Storage has been and continues to be an important element in the U. S. natural gas supply portfolio. In the future, the value of storage will be driven by new market forces and paradigm shifts in the magnitude of short-term and seasonal gas price volatilities. The relative values of storage components will change. Seasonal storage capacity will become more valuable (wider magnitude of time spreads). Injection capacity also will become more valuable (reflecting need to balance large LNG vaporization send-out against variable and seasonal demand). Short-term deliverability may become less valuable because of aggregate increases in short-term and peaking deliverability from new LNG storage/vaporization facilities...Read More
Underground natural gas storage presents a variety of economic justifications, depending on the perspective of the entity attempting to value a facility or service. In traditional rate making, the value attached to natural gas storage service was determined by the avoided cost economics of alternatives such as no-notice service. While avoided cost still plays a role for utilities, the value of natural gas storage is now evolving to valuing the services realized from expanded gas sales.
In general, as we see in the Figure 8.7 graph, high gas prices are typically associated with low storage periods...Read More
Order 636 caused little change in the gas business. The same producers are selling gas in the market. The same pipelines are transporting it to the same end users. Some issues have changed. Who controls the pipeline capacity? How is it billed? Who is selling the value-added services available from storage (or comparable paper constructs sometimes called "virtual storage")? What are the rules for trading gas, pipeline, and storage capacity? Most importantly, who is ultimately responsible for gas service at the residential level? State level unbundling is challenging these factors and may constitute a far more compelling issue for the evolution of the storage industry over the next 10 years than federal regulatory change...Read More
In the past, producers acted as limited participants or nonparticipants in gas storage and marketing, primarily because of the corporate culture that pervades most major players that categorize their primary business as exploration and production (E&P). The E&P cultural issue is compounded by the fact that storage operators rarely earn more than a 15% return on after-tax equity employed, and E&P firms believe that their projects should have much higher hurdle rates to accept the high failure rate encountered in the drilling business. A few producers are examining storage as an adjunct to developing affiliate marketing organizations...Read More
Storage has been a significant organizational function of interstate pipeline companies for many years. Open access and the elimination of merchant gas sales and services caused pipeline storage areas to effectively become "warehouse" operations. Order 636 allowed the pipelines to retain only such storage as required for operational integrity. Several major pipeline systems in the United States operate without the benefit of storage services for shippers or gas controls...Read More
Intrastate pipelines have emerged as the most aggressive targets in the pipeline asset resale market. The value of storage for intrastate pipelines, whether procured as an equity investment or as a service lease, is essentially identical to the values set by large suppliers and aggregators. Value is defined by the contribution that the storage service brings to the gas sales function. This includes the value available to suppliers from swing supply sales, emergency back-up sales, balancing, no-notice service sales, and incidental income from arbitrage and peaking sales.Read More