Tools › Gas storage valuation
Gas storage valuation on natural gas forward curves
Value a natural gas storage field on EOX forward curves: the best injection and withdrawal plan within its capacity, rates, fuel and costs, and a rolling-intrinsic backtest that re-hedges the plan on every day of EOX's own curve history.
What goes in, what comes out
The field
- The gas market, the term and the working gas capacity in MMBtu
- Injection and withdrawal rates in MMBtu a day
- Injection and withdrawal costs, and fuel lost on injection
- The inventory at the start, and what must be left at the end
The results
- Intrinsic value, in total and per MMBtu of capacity
- The plan month by month: injections, withdrawals, inventory and value
- A backtest over the last complete storage year: the value first hedged, the value re-hedging locked in, and how many times the plan changed
How it is valued
- Intrinsic value. The best monthly plan against the gas market's fixed-price forward curve: buy and inject when the curve is low, withdraw and sell when it is high, within every limit of the field.
- Rolling intrinsic backtest. The same field hedged on the curve a month before the storage year began, then re-optimised on every later curve date, trading the change in the plan at that day's prices. It shows how much of the field's option value re-hedging would have captured, on EOX's own daily curves.
Rates are flat, without the ratchets real fields have (slower injection when nearly full, slower withdrawal when nearly empty), so the result is an upper bound for a field with ratchets.
Example
A 1 Bcf field at HUB1, 10,000 MMBtu a day in, 20,000 out, $0.02 costs each way and 1% fuel, April to March:
HUB1 is a placeholder and values are illustrative.
Use it from
Excel
=EOX.GAS_STORAGE("HUB1",1000000,10000,20000,"2027-04","2028-03",0.02,0.02,0.01)Python
from eoxlive import EOX
eox = EOX("YOUR_KEY")
res = eox.gas_storage("HUB1", capacity=1_000_000, injection_rate=10_000, withdrawal_rate=20_000,
start="2027-04", end="2028-03", injection_cost=0.02, withdrawal_cost=0.02, fuel=0.01)
res["total"]["value"], res["total"]["backtest"]["value"]
res["months"] # the plan month by month, as a DataFrameOr in the browser, on the Valuation page, signed in with your EOX account.
Questions
- Which gas markets can I value storage at?
- Any natural gas market in your subscription with a fixed-price curve: the Henry Hub benchmark and the basis locations EOX publishes.
- What does the backtest add?
- Intrinsic value assumes the first plan is kept. A desk re-hedges as the curve moves; the backtest re-optimises on every past curve date and shows what that captured.
- Does it include extrinsic value from volatility?
- Not as an option model. The rolling-intrinsic backtest shows how much of that value re-hedging captured on past curves.
- Is this a valuation opinion?
- No. It is the field's value on EOX forward curves and past curves, for your own analysis.
Included with your subscription. The tools use the curves, vols and correlations your subscription already covers, under the same entitlements, and are never charged for separately. Results are for information only; values shown on this page are illustrative.