“Gas Storage Is Back In Style” – Dave Marchese, Caliche

Gas storage economics are recovering from a 2008-era overbuild as LNG and renewables integration drive rates back toward 30 cents/MCF/month.

• Overbuild hangover explains the gap: No major new US gas storage was built from roughly 2011 until now because 2005-08 overbuilding (project finance at L+225-250 on 20-30% contracted deals) crashed rates from ~25 cents/MCF/month to single digits once shale hit.
• LNG reliability drives demand: A single 600 MMcf/d LNG train outage forces gas into the spot market and tanks Henry Hub unless storage absorbs it via 'no-notice service'; Golden Pass LNG is contracted this way at Caliche's Beaumont site.

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