What is Natural Gas Storage?

Natural gas can be stored either underground in geologic formations such as salt caverns, depleted reservoirs and aquifers, or above ground in the form of liquefied natural gas (NGL) in specialty holding tanks. Unfortunately, neither underground nor above ground storage offer a perfect solution. The ability to access underground storage depends on a facility’s deliverability rate, which in term depends on geologic conditions, existing capacity utilization, and the amount base gas that is required. Salt caverns tend to have the most flexibility, but there are only so many of them in the United States. We estimate that as of December 2021, only 10% of U.S. underground working storage capacity came in the form of salt caverns, and the overwhelming majority of those exist in the Gulf Coast region. Above ground storage is usually just a temporary peaking solution, not only because of its expense, but also because boil-off gradually reduces the amount of supply on hand.