The EU has required Member States to fill their gas storage to 80% of its capacity before November 1, 2022 to ensure security of supply next winter
As a result of the war in Ukraine, the possibility of an interruption in the supply of gas from Russia to the European Union (EU) has sparked interest not only in possible supply alternatives, but also in how we can reduce consumption and store this hydrocarbon in anticipation for possible delivery problems.
Natural gas can be stored on a large scale in two ways:
-At first glance, a convenient management of the entrances and exits of the liquefied natural gas or LNG plants.
-Inject the hydrocarbon under pressure into the subsurface and then extract it at will. This last option, very common, and which this article focuses on, goes through the development of an infrastructure of underground warehouses whose purpose is to house minimum security stocks, also known as strategic reserves.
To ensure the maintenance of these minimum stocks, not only of natural gas, but also of petroleum products and liquefied petroleum gases (propane and butane), Spain has a system of mixed security of supply. The liabilities are shared between the Strategic Reserves of Petroleum Products Corporation (CORES) and the oil and gas industry.
CORES is assigned functions to monitor compliance with the minimum safety stock requirement. But in addition, as a distinctive activity compared to other similar European entities, its mission is also to ensure an adequate diversification of natural gas supplies to Spain, by checking that supplies from the same country of origin do not exceed 50% of amount to the total.
The minimum safety stocks are necessary to adapt supply to demand and to cope with peak consumption caused by seasonal variations (summer-winter) or by extreme weather events of a specific nature (floods, hurricanes, heat or cold waves) or by other unforeseen events such as supply interruptions due to commercial, diplomatic or even war conflicts (as is the case with the war in Ukraine).
Number of days of consumption or sale that must cover the minimum stocks of natural gas, liquefied petroleum gases and petroleum products. CORE
There are three main types of underground gas storage. Each of them has its own physical and economic characteristics, which determine its suitability. The two main characteristics of an underground storage facility are the ability to hold natural gas for future use and the speed at which stored gas reserves can be extracted.
1. Old oil or gas fields already exhausted
Many of the underground gas storage facilities take advantage of commercially depleted natural gas or oil fields located near consumption centers. This type of storage is common in countries or regions that are or have been hydrocarbon producers, both because of their availability and because existing wells and infrastructure can be used to convert a producing field into a warehouse.
These types of underground warehouses are usually the largest. Two examples in Spain are the storage facilities of Gaviota (Vizcaya) and Serrablo (Huesca).
2. Caves excavated in geological salt formations
The vast majority of storage facilities in cavities or salt caverns are built in diapir-type geological structures or salt domes.
The construction of these caverns, artificially created by dissolving salt by injecting hot water, is usually more expensive than the operations required to convert depleted oil and gas fields into storage.
However, salt caverns allow faster injection extraction of natural gas, which partially or completely compensates for this cost difference.
3. Deep saline aquifers
In some areas, natural saline aquifers have become underground gas deposits. An aquifer is suitable for gas storage if the porous and permeable rock formation that holds the water lies beneath an impermeable rock that seals off the previous one, preventing the escape of the water and gas injected upwards.
Although the geology of aquifers is similar to that of depleted oil or gas fields, their use as gas storage usually allows less flexibility in injection and recovery. An example of such a storage facility in Spain is that of Yela (Guadalajara).
The first underground storage facility was opened in the United States in 1915. According to Cedigaz, at the end of 2018 there were already 662 worldwide, with a total operational storage capacity of 421 billion cubic meters.
As for the EU, some interesting facts are the following:
-Germany has about 63 storage facilities with a total capacity of almost 22 billion cubic meters.
-Italy has about 14 with a total capacity of about 17 billion cubic meters.
-The Netherlands has 9 infrastructures (of which 5 are in salt caverns) with a total storage capacity of approximately 13 billion cubic meters.
-France has about 23 storage facilities (most in deep saline aquifers) with a total capacity of about 12 billion cubic meters.
-Spain has 4 operational storage facilities, with a total capacity of 3 billion cubic meters. The largest of them is Gaviota.
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According to Repsol data (compiled from various sources), the underground storage capacity of natural gas in the EU is about 95 billion cubic meters, spread over some 160 facilities in 18 countries. 73% of total EU capacity is concentrated in five countries: Germany, Italy, France, the Netherlands and Austria.
The EU’s storage capacity translates into an average of 99 days of gas consumption, with large differences between countries depending on their storage capacity and consumption. For example, the Austrian storage capacity almost covers annual consumption, while in Germany it would be less than 3 months and in Spain 34 days (Figures 5 and 6).
The demand for gas in Europe is highly seasonal and needs inventory management to compensate for the difference between winter and summer and to accommodate the supply.
In this sense, given a possible interruption in the supply of gas from Russia, it should be taken into account that according to Repsol’s own data (compiled from various sources), European gas storage will be at 26% of its winter season 2021/2022. capacity, below the historical average.
The EU has required Member States to fill their gas storage to 80% capacity by November 1, 2022 (a percentage to be increased to 90% in subsequent years) as a measure to increase security of supply. To achieve this, Europe would need to import more than 50 billion cubic meters from April to November.
European storage facilities are currently at 38% of their filling capacity (in Spain this percentage is over 60%), so they would need a maximum and continuous supply of LNG this summer, in addition to the gas they receive via pipelines (including Russian) , to meet the EU’s proposed 80% requirement by early November.
Not all European countries will be able to meet this requirement. Therefore, a new proposal was discussed on 11 May whereby the minimum gas storage obligations could be limited to a certain volume based on the annual gas demand over the past five years, which would provide relief for countries with large storage capacity.
This article was published in ‘The conversation’.
Source: La Verdad
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