Underground Gas Storage: A Comprehensive Outlook on Market Trends, Capacity & CapEx Forecasts

What are the market trends in subsurface gas storage?

Over recent years, we have noticed a steady increase in the demand for underground gas storage. This trend is driven by elements such as the drive for energy security, increased gas-fired power generation, and growth in unconventional gas production. Fluctuating gas prices have also played a role in steering entities towards investing in these storage facilities. The conversion of depleted hydrocarbon fields to storage reservoirs is increasingly common, reducing the environmental footprint and maximizing the utilization of existing infrastructure.

What is the current capacity status?

Global storage capacity has been exhibiting a robust upward trend, reflecting higher demand. The most significant growth has been evident in Europe and North America, while Asia, particularly China, shows potential for future expansion. Despite having substantial natural gas reserves, Russia's storage capacity appears underdeveloped, indicating a substantial growth opportunity. The use of salt caverns and aquifer reservoirs for storage, despite being cost-intensive, has increased due to their superior performance and inherent advantages for deliverability rates.

What does the capital expenditure forecast look like?

Investments towards expanding underground gas storage capacities are set to rise, with both private and state-owned entities keen on capitalizing on this segment. In regions with underdeveloped gas storage infrastructure, significant investments are expected. CapEx forecasts indicate positive trends, not only for infrastructure but also for technologies that improve storage efficiency and safety. However, policy changes and regulatory developments may affect these forecasts, reiterating the need for comprehensive risk assessment.