Underground Gas Storage Market

The global underground gas storage market is anticipated to expand at a CAGR of 3% during the forecast period of 2023 and 2031. Typically, underground gas storage facilities are created to accommodate the seasonal demand for gases worldwide. During periods of low demand, gases are stored in storage facilities and extracted during periods of high demand. storing gases in enormous underground reservoirs. Underground storage facilities for natural gas include depleted gas reservoirs, salt caverns, and aquifer reservoirs. These storage facilities are essential for providing a continuous supply of gas to meet the rising global energy demand.

Industrialization is the primary factor propelling the rise of this industry. Natural gas is the most important energy source on the planet. Due to its abundance, eco-friendliness, and increased use in a vast array of applications, it is projected that this gas will continue to play an increasingly significant role in countries with high energy demands. Due to the extensive development and acceptance of hydrogen cells and hydrogen-powered vehicles, hydrogen usage in the United States has also increased. To address the nation’s growing need for hydrogen, a number of firms have begun investing in underground hydrogen storage facilities in the United States.

Due to the widespread use of natural gas, hydrogen, and other fuels in numerous industries, the natural gas segment dominated the market in 2022, accounting for 92% of the global volume share. Natural gas is used to heat buildings and water, operate refrigeration and cooling equipment, cook, dry clothing, and brighten outdoor spaces in the commercial sector. Natural gas is also used as a fuel in heat and power systems. In the United States in 2022, the commercial sector accounted for around 11% of total natural gas consumption and 20% of total commercial energy use.

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Underground storage of natural gas is required to meet the demand for gas. Globally, around 430 billion cubic meters (bcm) of natural gas have been stored as of 2022, representing nearly 10% of total consumption. Gas storage facilities can accommodate both temporary and seasonal fluctuations in demand. Short-term price volatility and seasonal changes in natural gas prices between winter and summer are the two key growth drivers for the sector. Subterranean hydrogen storage is the underground storage of hydrogen in salt domes, abandoned oil and gas fields, and caverns. For many years, large quantities of hydrogen gas have been kept in caves. Hydrogen can be stored underground in mines, aquifers, excavated rock caverns, solution-mined salt domes, and other structures in order to provide grid energy storage, which is crucial for the hydrogen economy. The remainder is made up of carbon dioxide and helium. Supercritical Carbon Dioxide (CO2) with a critical point of 31.1°C and 72.9 atm can be stored underground (about 1,050 psi). CO2 possesses both gaseous and liquid characteristics at high temperatures and pressures. Prior to their release into the atmosphere, CO2 is extracted from industrial emissions via CCS and stored in subterranean geological formations.

The segment of kinds consists of depleted gas reservoirs, aquifer reservoirs, and salt caverns, among others. In 2022, the depleted gas reservoir category dominated the market and accounted for 65 percent of the global volume share. Depleted natural gas reservoirs account for 76% of the total volume of natural gas storage in the world. Salt caverns are less extensive and contain less volume than gas fields. The global demand for these reservoirs is predicted to be fueled by the government’s increased oversight of their expansion. In 2022, around 11% of the existing volume of underground natural gas storage was stored under aquifers. The geology of aquifers is similar to that of depleted natural gas resources. Aquifers are porous and permeable rock-based subsurface water storage structures. However, they are the least desirable and most costly option for natural gas storage. Existing salt deposits are responsible for the formation of salt caverns. Their walls have the structural strength of steel, making them resistant to reservoir degradation over the life of the storage facility.

A small quantity of natural gas that is pumped into storage can escape from salt caverns if it is not intentionally collected. The walls of the salt storage facility are long-lasting and airtight. Generally, salt caverns are far smaller than depleted gas deposits and aquifer storage facilities. The remaining distance is comprised of lined hard rock cavern storage and pore storage. Natural gas liquids (propane, butane) and crude oil are stored in hard rock caverns. Hydrogen is also stored as a liquefied or compressed gas at pressures between 100 and 250 bar in caves containing hard rock.

In 2022, Europe dominated the global sector, with around 55% of the market share. Russia’s confirmed natural gas reserves are the greatest in the world at 38 trillion cubic meters (1,341 trillion cubic meters). In Europe, there are roughly 4,269.6 bcf (billion cubic feet) of underground gas storage at more than 170 locations, 42 percent of which are in Germany. In terms of depleted reservoirs, France, Germany, Russia, and Italy have the highest requirement for natural gas storage. Depleted fields have the maximum quantity of natural gas due to their depth and natural hydrocarbon resources.

During the period forecast, North America is expected to become the largest regional market. This is a result of increased exploration and production of natural gas and hydrogen in the region. The United States has the largest underground gas storage market in North America due to its vast natural gas output. The majority of existing underground gas storage facilities are located in depleted natural gas or oil sources near to their respective consumption centers. However, the number of natural aquifers and salt cavern-based underground gas storage facilities in the United States has increased.

Asia-Pacific is anticipated to enjoy a substantial growth rate throughout the projection period due to growing domestic demand from end-use industries in countries such as China. China has witnessed increasing investments in subsurface gas storage and the development of new facilities. To satisfy the increased demand, the nation has built gas storage facilities. China has recently established clusters of natural gas storage at Bannan gas storage, Suqiao gas storage, and Dagang, North China.

The global market is highly competitive due to the presence of relatively concentrated multinational firms that are very competitive. On the global underground gas storage market, ADNOC, Baker Hughes Company, Chart Industries, Enbridge Inc., NAFTA a. s., NOV Inc., Royal Vopak, TransCanada PipeLines Ltd, and others are among the most notable companies.

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