Natural Gas Storage Market Expected to Reach $629 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Natural Gas Storage Market," The natural gas storage market was valued at $300.8 billion in 2021, and is estimated to reach $629.0 billion by 2031, growing at a CAGR of 7.4% from 2022 to 2031.

Natural gas is a mixture of methane, higher alkanes, and other hydrocarbons. It is extracted through natural reserves of oil, gas, and coal. The presence of natural gas is abundant in nature, however, it is a non-renewable source of energy. it is considered a clean fuel and has applications in several industries.

The natural gas storage market is witnessing exponential growth. With countries building and expanding storage capacities, the market is experiencing surged demand. There is an increase in exploration activities for the purpose of finding new natural gas reserves. The growing prices of oil and gas amidst the war have hampered market growth globally.

Natural gas is stored in aquifers, depleted mines, salt caverns, and others. The most used underground storage type is depleted mines. There are approximately 661 UGS worldwide of which at least 75-80% are depleted natural gas or oil fields. Natural aquifers have been converted to natural gas storage reservoirs. An aquifer is suitable for gas storage if the water-bearing sedimentary rock formation is overlaid with an impermeable cap rock. Salt caverns provide very high withdrawal and injection rates relative to their working gas capacity. Most natural gas is stored in underground storage, as it is safe and reliable. The deliverability rate of UGS is far better than above ground and other storage types.

Reducing carbon emissions is becoming a major concern for countries worldwide. According to IPCC, the rise in global temperature by 1.5 degrees has questioned the existing ways of living. The industrial sector, transportation, aviation sector, chemical industries, manufacturing industries, and others are actively looking for reducing carbon footprint and switching to renewable sources or clean sources of energy. Natural gas offers that solution and thus, directly impacts the natural gas storage market growth. The emphasis on increasing storage capacity by government and private players also acts as a driving factor for market growth. However, fluctuations in prices, demand-supply gaps due to ongoing crises, and changing political dynamics are acting as restraints for the regional growth of the natural gas storage market

The ongoing Russo-Ukrainian war has also hugely impacted the natural gas storage market growth in the region. With gas supplies being cut off from Nord Stream 1 and the delayed opening of Nord Stream 2, Russia retaliated to several sanctions imposed on the country by the union members. The prices for natural gas increased. Meanwhile, a recent report quotes that European Union has already achieved 80% natural gas storage without depending on Russia for the same. The war is expected to impact the market growth in the region. The situation is being closely monitored as it has dynamically changed political relations among several countries. Several sanctions being imposed have resulted in a slowly creeping recession-like scenario in the natural gas storage industry.

The natural gas storage market size is analyzed on the basis of type and region. Depending on the type, the market is classified into above-ground storage, underground storage, and others. Region-wise, natural gas storage market analysis is done across North America, Europe, Asia-Pacific, and LAMEA (Latin America, the Middle East, and Africa).

By type, the underground storage segment was the highest revenue contributor to the natural gas storage market growth. The same is projected to grow at a higher CAGR during the natural gas storage market forecast period. This is attributed to increased investment and a rise in projects (ongoing and planned) for sustainable and clean energy across the globe.

By region, North America was the highest revenue contributor. An increase in consumption from the residential and commercial sectors fostered market growth in North America. The growth of the natural gas storage market witnessed a short-term downfall as consumption was hampered by higher gas prices that triggered gas-to-coal switching in the U.S. power generation. While Canada and Mexico had a modest rise in consumption as compared to strong rebounds in other mature markets in 2021 post-pandemic. However, Asia-Pacific is projected to grow at a higher CAGR during the forecast period. This is attributed to several populated economies that have surged demand for natural gas. Moreover, sustainable fuel projects also contribute toward the growth of natural gas storage.

Regional Insights:

The LAMEA region witnessed around 3% growth in natural gas production from middle-east alone. The region’s storage market is driven hugely by Iran, UAE, and Qatar. Africa also witnessed a growth of 5% year-on-year basis for natural gas production which helped in driving the growth of the natural gas storage market. Brazil, Argentina, Ghana, and Senegal also contributed to the growth of the natural gas storage market.

The key players operating in the market are Saudi ARAMCO, Exxon Mobil Corporation, BP plc, Chevron, Rosneft Oil Co., Lukoil, Shell plc, Total Energies, and PJSC Gazprom. The recent natural gas storage market trends are collaboration and business expansion through exploration and partnerships, to sustain the market competition.

Key findings of the study

• The natural gas storage market size is provided in terms of revenue.
• Underground storage is projected to grow at the highest CAGR of approximately 7.5%, in terms of revenue, during the forecast period
• The North America region dominated the natural gas storage market share by over 32.0% in 2021
• Asia-Pacific is expected to provide natural gas storage market opportunities during the forecast period