Economics of Underground Storage of Oil and Gas
Authors: Hinterhuber H.H. 
Published: December 2007

My expositions are divided into four parts. The first part defines the whole system of economic optimizations, part defines the whole system of economic optimizations, whereby the connection and interdependence between the optimization of new storage systems and that of the routine operation of new and/or present storage systems are identified.

In the second part a global model is described for the optimization of a storage system from the point of view of layout and operation.

The third part is devoted to structural investment optimization; specimen cases for enlargement strategy are described which deal, with regard to the long-term profit maximization with the adoption of the storage systems to the demand which grows according to the individual concern and the optimum price strategy in combination with the optimum enlargement capacity profile.

The final section of the work is concerned with short-term production, transport and storage planning.

The expositions are valid only in so far as-long term profit maximization is accepted as the sole criterium of profit maximization is accepted as the sole criterium of decision. We must depart from the optimum layout and operating conditions to the extent to which political, urbanistic and supply-securing considerations limit the profit-objective.

Introduction

1. Aim and sphere of application of the expositions

The economic and technical problems of underground storage of petroleum and natural gas are among the most interesting and, at the same time, the most complicated spheres of company management in the oil industry. It is precisely here, however, that clear ideas oil the basic procedures and associations are the indispensable prerequisite for the optimum layout and operation of the underground storage systems

I have endeavored to reduce the problems of underground storage to their essentials and renouncing unnecessary technical and economic details to work out the central procedures and basic principles. principles. My expositions are divided into four parts. The first part defines the whole system of economic optimizations, whereby the connections and interdependence between the optimization of new storage systems and that of the routine operation of new and/or present storage systems are identified. present storage systems are identified. In the second part a global model is described for the optimization of a storage system from the point of view of layout and operations.

The third part is devoted to structural investment optimization; specimen cases for enlargement strategy are described which deal, with regard to the long-term profit maximization, with the adoption of the storage systems to the demand which grows according to the individual concern and the optimum price strategy in combination with the optimum enlargement capacity profile.

The final section of the work is concerned with short-term production, transport and storage planning. production, transport and storage planning. The expositions are valid only in so far as long-term profit maximization is accepted as the sole criterium of decision. We must depart from the optimum layout and operating conditions to the extent to which political, urbanistic and supply-securing considerations limit the profit-objective.