ET - For Midstream It Pays To Have Natural Gas Storage

2024-05-20 09:00:00 ET

Summary

• Storage tends to be a less exciting business line for energy infrastructure. However, current market conditions and forward expectations are reinforcing the benefits of natural gas storage.
• Companies with storage capacity can command higher rates in contract renewals or can directly benefit from arbitrage opportunities afforded by the futures curve.
• Storage is also useful when regional natural gas prices see extreme weakness.

Storage tends to be a less exciting business line for energy infrastructure. Companies simply rent space in a tank or cavern for a fee typically with a term of around three years. However, current market conditions and forward expectations are reinforcing the benefits of natural gas storage....

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