Williams to Acquire Hartree Partners Natural Gas Storage Assets

Natural gas storage — especially well-sited storage with lightning-fast deliverability rates — is taking on a new significance (and value) as LNG export facilities and power generators seek to manage their often-volatile gas demand. But developing new gas storage capacity is costly and, with only a few exceptions, it’s hard to make an economic case for greenfield projects. That reality has spurred a lot of interest among midstream companies in acquiring existing storage assets and, where feasible, expanding that storage. In today’s RBN blog, we discuss one of the biggest storage-acquisition deals to date: Williams Companies’ recent purchase of six facilities with a combined working gas capacity of 115 Bcf in Louisiana and Mississippi. (It’s not all that Williams has been up to on the gas-storage front.) 

Fast-changing dynamics in Gulf Coast natural gas, electricity and LNG export markets are increasing the value of gas storage in Texas, Louisiana and Mississippi — or, more specifically, the merit of quickly injecting and withdrawing gas to respond to market swings. As a result, interest in developing gas storage projects with high “deliverability" rates has taken off, with billions of cubic feet of new storage capacity already coming online and a lot more in the works. In today’s RBN blog, we’ll begin a look at why so many market participants — power generators, LNG operators/offtakers, midstreamers, marketers and traders — are chasing the “extrinsic” value of gas storage and where the new storage projects are being built.

Rising demand for natural gas storage in the Gulf Coast region has spurred growing interest and investment. A number of midstream companies have been making moves, either by expanding their existing storage facilities in Texas, Louisiana, Mississippi and Alabama or entering the space with acquisitions or plans for greenfield projects. As a result, more than 150 Bcf of new gas storage space is in various stages of development. In today’s RBN blog, we discuss highlights from our new Drill Down Report on Gulf Coast gas storage.