Gas storage: A must for Iran

TEHRAN June 17(Shana)–The gradual growth of gas storage from 180 bcm to 254 bcm by 2030 by Iran would require at least 120 billion euros in investment.

In today’s world, the rise and fall of energy consumption is a common phenomenon given the climate change during various periods of the year. In Iran, consumption of natural gas rises dramatically in the cold for heating houses, while in the summer and because of the need for cooling, consumption of electricity goes up.

Given the large difference between the level of consumption of natural gas in different seasons of the year, expansion of underground gas storage facilities during hot days of the year is vital for Iran to meet the growing need for the item in the country in peak days of winter and, at the same time, live up to its international liabilities for supplying natural gas to its foreign customers. Increasing the country’s gas storage capacity shall also lead to securing a firm toehold in world markets.

According to a report by Cedigaz, global gas storage capacity is expected to increase from 377 billion cubic meters (bcm) at the beginning of 2013 to 557-631 bcm by 2030. The incremental growth, 180-254 bcm by 2030, requires sustained investment all over the period: around €120 billion will need to be invested by 2030.

New storage markets (Asia, Middle East) account for around 60% of the incremental capacity through 2030. In mature markets (USA, most of Europe and the CIS), the growth in working capacity is limited. The focus is on increasing peak deliverability rather than storage volumes.

The world gas market is inclined to be fueled with enhanced investments so that constant energy supply is ensured.

At worldwide level, there are 688 underground gas storage facilities in operation in the world at the beginning of 2013, representing a working gas capacity of 377 bcm, or 10.3% of 2012 world gas consumption.

Working gas capacity has increased significantly since 2010 (+ 35 bcm), mainly under the impetus of Europe which added almost 14 bcm of capacity in the past three years. Due to long lead times, a large share of these storage facilities was decided in the mid-2000s, before the economic crisis and fall in European gas consumption. Underground gas storage has been developed in four regions: North America, Europe, the Commonwealth of Independent States (CIS), and Asia-Oceania, reported Cedigaz.

North America concentrates more than two thirds of the sites, with 414 storages in the US, and 59 in Canada, and a combined working capacity of 152 bcm (40% of the global total). There are 144 facilities in Europe (99 bcm), and 51 sites in the CIS with 51 facilities (115.5 bcm). Asia-Oceania has 18 sites (9.3 bcm of working capacity). There is only one site in Argentina as well as in Iran.

The US and Russia remain the leading countries with withdrawal capacities of respectively 3,327 and 728 million cubic meters per day (mcm/d). Germany ranks third with 537 mcm/d.

In Iran, Serajeh storage facilities in the vicinities of the central Qom Province was launched in 2012. The second phase of the facility came on-stream in 2013 with the capacity of nearly 5 mcm/d of gas. Once completed, the refinery unit of the facility will be able to process 10 mcm of gas on a daily basis.

1.3bcm of gas has so far been stored in the facility waiting to be injected to the country’s national gas trunklines when needed.

Last year, nearly 300 mcm of gas was stored in the facility which was consumed by the country during cold days of the winter after it was refined by the facilities refining unit.

Besides Serajeh, Shourijeh gas storage facility is also built and is ready for operation.

The facility can store up to 2.4bcm of gas in its first phase development. Its capacity is expected to cross 4.6bcm once the project is completed. According to managing-director of Iran Natural Gas Storage Company Masoud Samivand, the country needs 14% of its gas output stored for it to ensure security of the item’s supply during cold days of the year.

Accordingly, if the country consumes 107bcm of gas annually, which it does actually, it will need to store up to 14bcm of its gas in storage facilities.

Given the ongoing plans devised by Iran Natural Gas Storage Company, the country is expected to reach that level of underground storage capacity with the daily recovery of 130mcm by the end of the current national development plan in 2025.