Gas storage is principally used to meet seasonal 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 Gas is injected into storage during periods of low demand and withdrawn from storage during periods of peak demand.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:
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.
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.
Producers use storage to store any gas that is not immediately marketable, typically over the summer when demand is low and deliver it when in the winter months the demand is high.
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.
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 in production or distribution systems.
Gas storage ensures to some extent the reliability of gas supply to the end consumer at the lowest cost, which is what the regulatory body is there to ensure. This is a reason why the regulatory body is constantly monitoring storage inventory levels across the board.
Gas storage ensures commodity liquidity at the market centers. This helps contain natural gas price volatility and uncertainty.
Gas storage facilities are gaining more importance due to changes in natural gas demands. First, traditional supplies that were once relied upon to meet the winter peak demand are now unable to keep up. Second, there is a growing summer peak demand on natural gas, due to electric generation via gas-fired power plants.
III. There exist several characteristics of underground storage facilities, which need to be defined and measured. Match each volumetric measure with the corresponding description.
