June 10, 2008
Accessing cushion gas in an emergency
Analysis of:
DJ Portland Gas Patent Application | www.tradingmarkets.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Implications: Cushion gas is generally considered a liability as generally it will never be recovered. Portland Gas Storage Limited a quoted UK company specialising in natural gas storage has filed a patent proposing a method of accessing cushion gas in times of exceptionally high demand. The concept is simple, so simple that the patent might fail. The proposal is to pump a liquid into the storage facility to displace the cushion gas. One suggestion is to use sea water.
Analysis: While this approach confirms Portland Gas as an innovative company it is difficult to see how it could be commercialised.
By definition this is for an event which might happen once in perhaps ten to 20 years. It is difficult therefore to see how the capital investment - pumps, filters, liquid storage etc. could be funded.
In addition the time and money taken to refill and recommission the storage facility with attendant lost revenue while this was taking place.
The concept therefore appears to have very limited application other than in markets or areas with a shortage of storage.
Analysis: While this approach confirms Portland Gas as an innovative company it is difficult to see how it could be commercialised.
By definition this is for an event which might happen once in perhaps ten to 20 years. It is difficult therefore to see how the capital investment - pumps, filters, liquid storage etc. could be funded.
In addition the time and money taken to refill and recommission the storage facility with attendant lost revenue while this was taking place.
The concept therefore appears to have very limited application other than in markets or areas with a shortage of storage.
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