Under Ground Storage (UGS)

 
Transportation of natural gas through high pressure pipelines can be interrupted for various reasons;
causing huge losses of production in the downstream industry. Underground storage of gas provides the
short term standby reserves to mitigate such risks of interruption in supplies until the main stream
supplies are restoredor to meet fluctuations in demand such as winter peak slaving. UGS projects have
been implemented as a viable alternative for the continuity of gas supply across the globe; especially
USA, UK, Germany, Russia and Turkey have developed huge UGS facilities by deploying depleted gas
fields, salt caverns and aquifers. Keeping in view the upcoming natural gas import projects including IPI
and TAPI, ISGS is planning to develop and implement this project parallel with the commissioning of
these pipeline projects to ensure the uninterrupted supply of natural gas.
 
 
 
 
Project Background
 
An Asian Development Bank (ADB) Mission visited Pakistan during September 2003, for providing
Technical Assistance (TA) for undertaking a feasibility study in selecting and developing underground
gas storage system. The purpose of the study was to identify suitable underground reservoirs in Pakistan
that could be used to store natural gas for: (i) meeting seasonal gas demand fluctuations; and (ii)
Strategic Underground Gas Storage (SUGS), for emergency supply into the proposed gas import
pipelines.

A Feasibility Study on the development of underground gas storages was undertaken by SOFREGAZ,
France in 2004.. The Consultant has extensively studied a number of potential reservoir sites including
depleted gas fields and prepared a short-list of potential storage reservoirs and estimating the capital &
operating costs and time lines to ready these reservoirs as strategic gas storages.

The Consultant submitted the Final Report in November 2007 and recommended two potential sites of
Khorewah and Bokhari in the Badin Block in Sindh Province for conversion into gas storages, and has
also proposed various options for the project structure, financing and revenue generation from these gas
storage projects.
 
Current Status
 
In the recent past, a Task Force headed by DG (Gas) has been instituted by the Secretary, MPNR to
develop UGS on a fast track basis. The MPNR has asked ISGS to develop UGS and act as Secretariat of
the Task Force. ISGS, has hired a local consultant to undertake techno-economic evaluation of
developing UGS as strategic storage vs. other alternatives, e.g: * use of Furnace Oil, * Swing Production
from existing producing Fields or * RLNG at City Gate Terminals; Consultant�s scope includes
updating of capital cost and storage fee estimates for selected storage sites. The Terms of Reference also
includes the preparation of a draft national policy for the development of UGS. In the meantime, ISGS
has taken up the matter with BP for indication of its interest in the UGS development. After completion
of the initial research, a techno-economic study with recommendation for Approval of UGS
development along with National Gas Storage Policy will be presented to the ECC. Formal approval will
also be requested for ISGS to lead the development of UGS in Pakistan along with identification of
sources and allocation of required funds.