Industrial Pipe

Storage Model

Natural gas storage provides value by allowing injection and accumulation of surplus natural gas during periods of low demand when prices are low, and permitting withdrawal during periods of increased demand when prices are high.

This model computes the intrinsic value of storage. (See discussion of the intrinsic value at our blog)

Help

If you need help with model inputs or if you have other questions, please contact us at:
info@adaptiverisk.com


Fix input errors below and run again:

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The working capacity of the storage facility. ?
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The day on which you are valuing the contract. The valuation date can occur after the start date if you are valuing the contract inside the storage operating period. ?
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to First and last day you can inject/withdraw gas to/from the storage. ?
{{getError('t0')}} {{getError('tf')}}

Rate Constraints

The maximal daily rate of injection into storage.

As the level of natural gas increases inside the storage facility, pressure rises and the maximum amount of natural gas that can feasibly be injected, decreases.

Use ratchets to specify different injection rates based on the level of natural gas inside the storage facility.

Injection Rates ?

Pro feature. Requires credits.

pro

Pro feature. Requires credits.

pro

The maximal daily rate of withdrawal from storage.

Use ratchets to specify different withdrawal rates based on the level of natural gas inside the storage facility.

Withdrawal Rates ?

Pro feature. Requires credits.

pro

Pro feature. Requires credits.

pro

Level Constraints

The final inventory level in storage after the last day of operation period as specified by the storage contract. ?
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Pro feature. Requires credits.

pro

Volume Constraints

Pro feature. Requires credits.

pro
Injection/Withdrawal Costs - fixed payment per unit of gas in/out of storage.

Injection/Withdrawal Fuel - part of injected/withdrawn gas that is used to power storage compressors. This cost is expressed as % of total injected/withdrawn gas.

Injection/Withdrawal Costs ?

Pro feature. Requires credits.

pro
Period Injection cost ($/MMBtu) Injection fuel (%) Withdrawal cost ($/MMBtu) Withdrawal fuel (%)
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Initial Level and Hedge

The initial inventory level in storage at the start of operation period (or valuation date if it is inside of operation period). The level is expressed as % of capacity. ?
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Pro feature. Requires credits.

pro
Existing position in forward contracts. All values are usually 0 for initial valuation. ?
Period Position (% of capacity)
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Bid/ask prices of forwards for each period.

Discount factors are to the middle of each period.

Market Data ?

Period Bid ($/MMBtu) Ask ($/MMBtu) Discount Factor
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