Natural gas is put in storage during the summer months when demand is lower for the upcoming winter season. Most of the natural gas is stored underground. In the United States most of the natural gas is stored in depleted oil and natural gas fields. There are a lot of these fields and they already have the infrastructure in place to accumulate the natural gas and the pipeline connections to distribute it. The most popular depleted fields are ones close to high usage areas. Not all fields are ideal for this natural gas storage.
Natural gas storage companies use depleted fields that are well sealed without a lot of compartments that can hold and release the gas efficiently. These fields are rock formations and despite the use of the latest technologies to inspect the formation gas can still escape into unforeseen areas where it can't be extracted. Advanced reservoir modeling, visualization and simulation techniques used in natural gas exploration and production are being used by some companies to better understand the field prior to storage.
One focus of research in natural gas storage management is on installing horizontal wells in existing storage fields. These horizontal wells increase the speed in which the natural gas can be injected and withdrawn from the field. This increased speed really helps on the delivery end as the gas can be delivered faster during high demand periods. The horizontal wells also reduce the number of wells needed to operate in a storage field.
About 13% of the natural gas used in the United States comes from storage facilities. There are around 400 storage reservoirs located predominantly near the major Eastern markets and middle of the country markets. There is almost 4 trillion cubic feet of storage capacity. There are three types of storage used for natural gas: depleted oil and gas reservoirs, salt caverns and aquifers. Depleted oil and gas reservoirs account for 87% of the total storage capacity, salt caverns 3% and aquifers 10%.
Pipeline companies are the main owners and operators of these storage facilities. These pipeline companies don't necessarily own the natural gas in storage. Most of this gas is leased by the distribution companies or the end users. The pipeline companies purchase the natural gas from oil companies like, Western Pipeline Corporation, and sell it to distribution companies or end users. Their storage facilities are used to hold this natural gas that has been sold or leased to these companies.
About the Author
Mickey Horn is the Executive VP of Investor Relations of Western Pipeline Corporation. Western Pipeline Corpspecializes in identifying, acquiring and developing existing, producing reserves on behalf of its individual clients.
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