Underground gas storage (UGS) facilities are an integral part of the Russian Unified Gas Supply System and are situated in the main gas consuming regions. UGS facilities help smooth out seasonal fluctuations in gas demand, reduce peak loads on the Unified Gas Supply System and provide for better flexibility and reliability of gas supply. The network of UGS facilities supplies Russian consumers with up to 20 per cent of gas during the heating season and up to 30 per cent of gas during cold snaps. Over the entire operation period 2 trillion cubic meters of natural gas circulated through the domestic UGS facilities.
UGS facilities in Russia
There are 25 UGS facilities operational in the Russian Federation. 8 were built in aquifers and the remaining 17 – in depleted gas fields.
UGS capacities expansion is a strategic objective of Gazprom. By the 2008–2009 heating season startup Gazprom raised the average daily send-out and the peak daily send-out of UGS facilities to 500 and 620 million cubic meters, respectively. The working gas capacity was equal to 64 billion cubic meters.
Peak daily send-out of Russian UGS facilities by heating season startup, million cubic meters
Due to the economic crisis and low demand for natural gas in Russia and abroad, Gazprom had to suspend the buildup in the working gas capacity and the daily send-out at the existing UGS facilities between 2009 and 2010. In this period the natural gas storage sector was therefore facing the major challenge of maintaining the achieved potential and the high level of reliability in the existing UGS facilities through their reconstruction and retrofitting.
The projected growth in gas demand determines the need to continue the UGS business development. By 2020 Gazprom is going to increase the peak daily send-out of Russian UGS facilities to 1 billion cubic meters.
Deliverability of Gazprom’s UGS facilities in Russia
At present, Gazprom is constructing three UGS facilities in Russia:
- the Udmurtia reserving complex in an aquifer;
- the Kaliningradskoye UGS facility in salt caverns;
- the Volgogradskoye UGS facility in salt caverns.
Between 2011 and 2015 the Company is planning to initiate construction of Bednodemyanovskoye, Novomoskovskoye and Shatrovskoye UGS facilities along with gas storages in the Republic of Tatarstan.
Gazprom will retrofit and expand some of the existing UGS facilities, namely Kasimovskoye, Kushchevskoye, Punginskoye, Sovkhoznoye and Stepnovskoye.
A wide scope of work is to be performed in Eastern Siberia and the Far East to find the formations suitable for constructing the underground facilities for natural gas and helium concentrate storage.
UGS facilities in Europe
As part of the strategy aimed at securing natural gas supplies to European consumers, Gazprom is executing UGS projects in the countries transiting the bulk of gas exported from Russia:
- Gazprom and WINGAS (a joint venture of Gazprom and Wintershall Holding) operate Europe’s largest Rehden UGS facility with the working gas capacity exceeding 4 billion cubic meters;
- Gazprom, WINGAS and RAG operate the Haidach UGS facility Phase 1 in Austria with the working gas capacity of 1.2 billion cubic meters and the daily send-out of 12 million cubic meters. In total, Gazprom holds two-thirds of the project capacity;
- Gazprom also holds shares in other companies owning and operating UGS facilities: ArmRosGazprom (Armenia), Latvijas Gaze (Latvia) and VNG AG (Germany);
- Under the lease agreement with Vitol, since 2005 Gazprom has gained 5-year access to 50 per cent of the Humbly Grove UGS facility (UK). In 2007 Gazprom raised its share to 75 per cent. In November 2010 the existing agreement was extended to 2016.
.jpg "Gazprom’s operational and prospective UGS facilities abroad")
Moreover, Gazprom is studying the opportunities for implementing new UGS construction and operation projects in cooperation with its European partners:
- VNG – the Katharina UGS facility (working gas – above 600 million cubic meters) is being constructed near Bernburg, Germany;
- TAQA – an agreement has been reached on the Bergermeer UGS facility in the Netherlands. As was agreed, in exchange for a certain amount of cushion gas provided on a temporary basis for injection into the facility, Gazprom will gain access to its working gas and acquire a share in the company acting as the facility maintenance operator;
- Srbijagas – agreements have been reached on joint implementation of the Banatski Dvor UGS project (working gas – 450 million cubic meters). To construct and operate the facility, a joint venture is being set up with the following shareholding structure: Gazprom – 51 per cent, Srbijagas – 49 per cent;
- In addition, Gazprom is studying the feasibility of potential engagement in UGS projects in Belgium, the Czech Republic, France, Romania, Slovakia, Turkey, the UK and other countries. In case positive results are obtained, the Russian party and the relevant foreign partners will start the process of bilateral documents coordination targeted at executing the UGS facilities construction projects.
Deliverability of Gazprom’s UGS facilities abroad