Demand and pricing for gas vary over time (from hour-to-hour, day-to-day, and season-to-season).
It is more efficient to produce and transport gas at a relatively consistent level rather than according to the specific demand at any given moment.
So that market area demand peaks can be met even when transportation capacity is inadequate to serve peak demands. Storing gas enables market demand to be met without dramatically altering production and transportation levels.
Short-term storage can be provided using above-ground facilities, or by holding an inventory of gas within the system’s pipes. Gas system operators use line pack as a means of balancing the system or meeting customer demand even if supply delivered to the system on a given day does not match consumption. On some pipelines, use of line pack is also used to offer parking and lending services.
Longer-term storage is available through underground facilities which may be located at either the production area (production-side storage) or near the citygate (market-area storage). This is done by injecting gas into underground formations when it is not required by the market, and subsequently withdrawing it when there is market demand. Most gas storage facilities are located underground, commonly in depleted gas or oil reservoirs, aquifers, or underground caverns such as salt domes.
Depleted reservoirs are most common because they often already have production equipment in place and are proven to be efficient storage facilities. However, salt cavern and aquifer storage may be appropriate for specific uses such as fast turn-around storage. Underground storage is only available in regions with appropriate geology, and thus is not available everywhere.
Here is how this process works. Natural gas from a pipeline is further pressurized so that it can be injected into the underground storage facility. If a reservoir is being used, the gas will occupy the same geologic formations it occupied prior to being produced. As the gas is injected, the pressure inside the reservoir (or other suitable formation) increases. When it is time to withdraw the gas, the field operator opens valves to allow the gas to flow to the surface. The accumulated pressure acts in much the same way as a new discovery, pushing the gas toward the lower pressure on the surface.
A certain quantity of "cushion" gas is required for the gas to be withdrawn from the storage facility. This gas is not withdrawn during the process but stays in the reservoir to provide enough pressure for the withdrawal gas to flow. "Working" gas, in contrast to cushion gas, is the gas that is injected and withdrawn – or cycled – during the storage cycle. As the gas is withdrawn, it is processed to remove any contaminants or water and then enters the pipeline.
Traditionally, gas was injected into storage facilities in the summer months when usage was lowest and withdrawn during the winter months when usage was highest (seasonal storage). In other words, gas was cycled on a yearly basis. This traditional storage cycle also allowed storage users to take advantage of pricing differentials because gas historically has been cheaper during the summer months. However, with the increased use of natural gas for electric generation purposes and less stability in pricing patterns, storage is now cycled throughout the year – both to meet peak demand and to take advantage of pricing differentials. Withdrawals and injections may also be used on peak cold winter days to manage system reliability by keeping desired amounts of gas in distribution lines.
In areas where underground storage is not available, LDCs use LNG storage and propane-air peak shaving plants to provide gas to meet peak needs. LNG facilities cool and liquefy natural gas that is stored at near atmospheric pressure in large tanks with a double wall design similar to a large thermos. When peak supplies are needed, the gas is warmed, converted to vapor, and then returned to the natural gas pipeline network. A propane-air system takes advantage of the fact that propane, when combined with the right mixture of air, burns similarly to natural gas. In the propane-air system, liquid propane is stored in tanks. When peak supplies are required, the propane is heated to the boiling point in a vaporizer, blended with air to create the right burning characteristics, pressurized to pipe pressures, and injected into the distribution system.