UNDERGROUND GAS

STORAGES
General overview

July 2000
 N ATURAL GAS
Advantages
– High energy efficiency
– Flexibility and ease of use
– Environmentally friendly clean properties
– Large reserves

Drawback: Gas is not liquid

– Expensive infrastructures for transport and distribution
• pipe, compression stations, LNG tanker
– Difficult to store

July 2000
 H ISTORY OF THE NATURAL GAS
Before WW2
– NG is a by-product, usually flared
– Only local markets in the USA

After WW2
– NG market grew from a regional to an international
dimension
– 1944: First high pressure pipe (2000km in the USA)
– 1964: First LNG chain between Algeria and Europe

Nowadays
– Increasing price of oil
– Inter-continental exchanges (LNG)
– Gas stock exchange (“spot price”)

July 2000
 H ISTORY OF THE U.G.S.
Before WW2
– 1915: First UGS in a depleted field in Canada
– First constructions along the main axis between
Texas and the North/East of the USA

After WW2
– First UGS in aquifers and salt cavities
– Development of UGS in Europe, initially for coal gas
and then for natural gas

Nowadays
– High deliverability UGS
• Horizontal wells, advanced stimulation fracturation
• lined rock cavern

July 2000
 M ODULATION
Gas consumers:
– Household
– Industry
– Power generation
– Chemical feedstock

Modulations types:
– Within one day
– Within one week
– Within one year: seasonality
– Within one decade
– Security supply

July 2000
 N ATURAL GAS SALES BY SECTOR
Inland sales of natural gas by sector in
the European Union (EU15) in 1997

6%
15% 31% Residential
Commercial
Industry
Power Plants
10% Others
38%
Total: 13,666.1 PJ

Sources: EUROGAS, 1998 Publication of gas statistics & prospects

July 2000
 S EASONALITY
Seasonality of Natural Gas Supply &
Demand in North America

July 2000
 M ODULATION
Comparison between consumption
and modulation in Europe (EU15)
3500
Energy equivalent (PJ)
3000 Inland Sales
2500
2000 Indigenous
Production
1500
1000 Net Imports
500
0 Working
-500 Capacity in
UGS

Sources: EUROGAS, 1998 Publication of gas statistics & prospects (1m³39MJ)

July 2000
 M ODULATION
Means to match offer and demand
– Gas price / interruptible contract
– Network flexibility
– Liquefied gas (LNG-peak shaver)
– Underground Gas Storage

July 2000
 T YPES OF U.G.S.
Depleted fields

Aquifers

Salt cavities

Abandoned mines, lined rock cavern

July 2000
 F UNCTIONS OF THE U.G.S.
Balance Seasonal load fluctuations

Constitute Strategic reserves

Peak-Shavers in days of high demand

July 2000
 F UNCTIONS OF THE U.G.S.
Schematic Load Duration
Daily Demand

Propane peak shaving units

Liquefied Natural Gas

Salt Caverns

Depleted Fields & Aquifer

Base Load Pipeline Capacity

Return to storage

0 Winter Spring-Fall Summer 365 days

Sources: CEDIGAZ, 1995
July 2000
 M AIN PARAMETERS Median Value
Pressure (MPa)
– Pipeline pressure 6.4
– Reservoir pressure 4 - 9.85
– Well Head Pressure 8.5

Volumes (106 m³)

– Pore volume, aquifer extent -
– Working capacity 360
– Cushion gas 340

Flow rates (106 m³/day)

– Deliverability 5.4
– Injectivity 3.4
– Mean deliverability 3

Sources: 21st World Gas Conference, report of working committee 1

July 2000
 D ESIGN FACTORS Median Value
Site selection
– Reservoir depth 850m below ground
– Distance to main pipeline -
– Structure extension area 2.3 106 m²

Well design
– Nb. Of wells (inj./withd.) 12
– Diameter 5”
– Completion -
Surface installation
– Compression power
14.7 MW
– Treatment units
1.35 m³/106 m³
• max. processing WGR

Sources: 21st World Gas Conference, report of working committee 1

July 2000
 T YPICAL STORAGE COSTS
Exploration
– Investigation permits
– Engineering

Above Ground
– Pipeline to the network
– Compressor system
– Dehydration system
– Gathering and metering system

Below ground
– Application for permits
– Production and observation wells

Cushion gas

July 2000
 C OSTS
Relative Costs of various storage
alternatives

July 2000
 C OSTS
Typical Capital cost distribution

% Aquifer Depleted Field Salt Cavern

Exploration 15 5 5
Above Ground 25 35 30
Below Ground 30 25 45
Cushion gas 30 35 20

Sources: United Nations Economic Commission for Europe, 1999

July 2000
 C OST OF GAS STORAGE
Average Cost of construction (USA)
Cost per working volume ($/m³) Grass Roots Expansion
Depleted Fields
dry gas, 1 Turn a year 0.11-0.14 0.07-0.11
dry gas, 4 Turns a year 0.18-0.25 0.14-0.21
Gas & Liquids
1 Turn a year 0.14-0.18 0.11-0.14
4 Turns a year 0.21-0.28 0.18-0.25
Aquifers
1 Turn a year 0.14-0.18 0.11-0.14
4 Turn a year 0.21-0.28 0.18-0.25
Salt Caverns
12 Turns a year
Domal Salt 0.28-0.53 0.14-0.28
Bedded Salt 0.42-0.71 0.21-0.35
Sources: FERC, 1998
July 2000
 C OSTS
Comparison of investment costs
between Europe and USA for storage
of size 100 MMm³

Cost per working gas Cost per deliverability

type (US$/m³) (US$/m³/d)
Europe USA Europe USA
Aquifer 0.35 - 0.6 0.14* 35 - 60 10
Depleted field 0.35 - 0.6 0.12 35 - 60 5
Salt cavern 0.7 - 1 0.3 7 - 10 2

*Size: 500 MMm³

Sources: United Nations Economic Commission for Europe, 1999

July 2000
 D EVELOPMENT TIME
Time from identification to operations

Depleted fields:
– 1 to 3 years

Aquifers:
– 5 to 7 years

Salt Caverns:
– 3 to 5 years

July 2000
 S TATISTICS
Operational U.G.S. in the world

Nb. Pore Nb. Cavern Total nb. Working gas Withdrawal

-storage -storage U.G.S. volume capacity
area # # # BCM BCM/Day
West Europe 56 22 78 55 1.09
East Europe & Central Asia 64 3 67 131 1.00
Canada 31 7 38 14 0.20
USA 383 27 410 106 2.15
Australia & Japan 7 0 7 2 0.01
Total 541 59 600 308 4.45

Sources: 21st World Gas Conference, report of working committee 1

July 2000
 U NDERGROUND STORAGES Sweden
Finland
Norway

U.G.S. in the European Union

Estonia

Latvia Russian Fed.

Denmark
Lithuania

Belarus
Irland
United Netherlands Poland
Kingdom
Number of stations Belgium
Germany

Depleted fields 35 Lux.

Czech Rep.
Ukraine
Slovakia
Aquifers 23 France Austria Moldavia

Salt cavities 21 Switzerland

Slovenia
Hungary
Romania
other types 2 Croatia
Bosnia-Her.
Italy Yugoslavia Bulgaria
F. Y. R. M
Spain
Albania
Portugal

Greece

Sources: United Nations Economic Commission for Europe, 1999

July 2000