Underground Gas Storage Glossary - Innovative Energy Consulting ...

Innovative Energy Consulting Pty LtdUnderground Gas Storage (UGS): All subsurface and surface facilitiesrequired for the storage and for the withdrawal and injection of natural gas.Naturally or artificially developed containments in subsurface geological strataare used for the storage of natural gas. Several subsurface storage horizons orcaverns may be connected to one common surface facility, which is referred toas the underground gas storage locationUpstream Storage: see Supply Area StorageVariable (Commodity) Charge: Generally a charge per unit of gas injectedand/or withdrawn from storage as per the rights and obligations pertaining to agas storage lease that is payable each month to the lessor by the lessee. Thischarge may be a combination of gas shrinkage and $/Mcf and is usually notbased on actual costs since whether or not compression is required or notionalflows are part of the transaction are irrelevant. Analogous to commodity chargesfor gas pipeline service.Withdrawal Profile: Dependency between the withdrawal rate and thewithdrawn working gas volume. The withdrawal profile and the time (utilizationhours) required for withdrawal are indicative of the layout of an underground gasstorage facility. The withdrawal profile usually consists of a constant rate(plateau) period (see ‘Nominal Withdrawal Rate’) followed by a period ofdeclining rates.Withdrawal Rate: Most often expressed as a measure of the amount of gas thatcan be delivered (withdrawn) from a storage facility on a daily basis. WithdrawalRate may also referred to as the deliverability rate, delivery capacity, orwithdrawal capacity and is usually expressed in terms of millions of cubic feet perday (MMcf/day). The Withdrawal Rate of a given storage facility is variable, anddepends on factors such as the amount of gas in the reservoir at any particulartime (Gas In Place), the pressure within the reservoir, compression capabilityavailable to the reservoir, the configuration and capabilities of surface facilitiesassociated with the reservoir, and other factors. In general, a facility's WithdrawalRate varies directly with the Gas In Place: it is at its highest when the reservoir orsalt cavern is most full and declines as Working Gas is withdrawn.Withdrawal Season: The continuous period in any given Gas Storage Year thatis characterized by a general tightening of gas production capacity to gasdemand requirements (i.e. a higher than average gas price or backwardation inthe forward price curve). The Withdrawal Season extends from November 1 toMarch 31 in North America.Working Gas: Natural Gas that has been injected into an UGS facility andstored therein temporarily with the intention of withdrawing it.Underground Gas Storage Terminology 18