Transmission, Distribution, & Refining
Natural Gas Storage – End User Interaction

DE-AC21-94MC31114

Goal: 
The goal is to develop an understanding of the market for natural gas storage that will provide for rigorous evaluation of federal research and development opportunities in storage technologies.

Background: 
Regulatory changes coupled with the increase in demand from natural gas-fueled power generators have created new opportunities and challenges for the underground gas storage sector of the nation's gas delivery infrastructure. These developments create the need to identify market areas and end use sectors where new natural gas underground storage capacity can be economically employed, develop a storage evaluation system that provides an analytical tool to evaluate storage requirements under alternative economic, technology, and market conditions, and analyze the economic and technical feasibility of alternatives to conventional underground gas storage.

Performers:
ICF Resources Inc. (ICF) – project management and research product

Location:
Fairfax, Virginia

Accomplishments

  • Defined the storage market, including identification of existing and proposed storage facilities and their costs,
  • Developed an analytical basis for comparing the economics of gas storage with competitors and performed preliminary assessment of where additional storage may be required,
  • Modified the existing DOE model for the U.S. natural gas system (Gas System Analysis Model or GSAM) to evaluate the effects of technology change on storage reservoirs in the same manner as it is evaluated for production reservoirs, and
  • Evaluated a range of alternative storage technologies under varying market conditions.

The first task of this project was to characterize current and forecast market demands for gas identify regions where additional storage capacity would most likely be needed. A comprehensive database of existing and proposed storage capacity was built for this purpose, as well as an analytical basis for comparing the economics of gas storage versus its principal alternatives (pipeline capacity and peak shaving). These were used to develop preliminary indications of where additional gas storage might be needed, and a Topical Report on this first task was prepared.

In the second task, technical and economic screening criteria for identifying potential gas storage reservoirs were developed and d GSAM was modified to predict reservoir performance under conditions of gas injection and withdrawal. The modified model was tested using known storage reservoirs and then regional storage potential was characterized through the identification of suitable reservoirs and the modeling of their potential storage performance.

The third task involved testing the effects of applying aggressive reservoir development technology (for both E&P and storage) on the need, cost and performance of new storage capacity. Then the addition of gas storage on gas supply, demand and price projections was evaluated, under various economic and technology assumptions.

A final report was prepared that provided detailed descriptions of 29 major findings related to the current and future market for gas storage services and the relationship between technology application and demand for storage.

Current Status and Remaining Tasks
This project is completed and both a Topical Report on the results of the first task and a Final report are available.

Project Start: September 30, 1994
Project End: July 31, 1997

Anticipated DOE Contribution: $603,558
Performer Contribution: $0

Contact Information:
NETL – Tony Zammerilli (anthony.zammerilli@netl.doe.gov or 304-285-4641)
ICF – Shree Vikas (703-934-3016)

Additional Information:
Task 2 Topical Report [PDF-10649KB] 
Final Report  [PDF-16889KB]