ADI assessed the market value of natural gas and hydrogen storage assets near the U.S. Gulf Coast through a detailed analysis of regional pipeline interconnects and seasonal spreads. The work evaluated the premium commanded by high-deliverability salt caverns and the technical constraints of repurposing infrastructure for hydrogen.
The client
Natural gas midstream operator
The situation
Investment risk surrounding the configuration of existing pipeline and storage assets to serve LNG feedgas and industrial customers.
ADI’s contributions
Regional infrastructure mapping
ADI utilized proprietary GIS data to identify high-fit counterparties like LNG terminals and peaker plants along specific pipeline laterals.
Storage spread modeling
Analysis of winter/summer spreads and scarcity premiums provided a basis for negotiating value-based intrastate pipeline rates.
Technical cost estimation
ADI modeled capex for hydrogen salt caverns using inflation adjustments to define the breakeven for third-party storage providers.
Contract structure optimization
Recommendations for bundled storage and pipeline offerings with strict imbalance penalties to protect operational margins.
Key outcomes
- Developed a targeted commercial strategy prioritizing firm transportation for reliability-driven LNG and industrial counterparties.
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