Underground Natural Gas Storage Market

Increasing demand for natural gas storage systems is driving market growth

The demand and production of natural gas are rising rapidly, mainly due to its growing applications in power generation and transport industries. Natural gas can be easily stored for an indefinite time. Natural gas is only sometimes needed immediately, so it is stored underground. Moreover, the US Department of Energy (DoE) and industry partners have checked the feasibility of storing chilled natural gas in mined, hard-rock facilities. The concept of chilling gas before storage, if applied to planned or existing bedded salt storage caverns, could significantly increase the storage capacity in the existing volume of natural gas.

However, due to the lack of demand in the last few months due to the ongoing pandemic, many countries are facing gas storage problems. This factor drives the market CAGR in the forecast period.

The demand will also be increased by technical developments and growing public knowledge of natural gas's environmental benefits. During the forecast timeframe, factors such as rising natural gas consumption in the industrial, chemical, and transportation sectors, mostly from Asia-Pacific countries, are anticipated to propel the gas storage market. Additionally, as the world works toward a low-carbon economy, the benefits of using fossil fuel as a clean-burning, versatile, and economical fuel are anticipated to lead to an increase in natural gas prices in the future.

However, it is anticipated that the demand's seasonality and volatility, along with the mismatch between demand and supply will impede the market's expansion for natural gas storage. The high natural gas production is anticipated to spur oil and gas production and boost the Underground Natural Gas Storage market revenue.

The Global Underground Natural Gas Storage Market Industry is projected to experience substantial growth, with estimates indicating a rise from 430.2 USD Billion in 2024 to 604.0 USD Billion by 2035. This growth trajectory suggests a compound annual growth rate (CAGR) of 3.13% from 2025 to 2035. Such projections reflect the increasing reliance on natural gas as a key energy source, driven by both demand and regulatory support. The anticipated expansion of storage capacities will play a pivotal role in meeting future energy needs and ensuring the stability of gas supplies.

The Global Underground Natural Gas Storage Market Industry is experiencing heightened demand for natural gas, driven by its role as a cleaner alternative to coal and oil. As countries strive to meet their energy needs while reducing carbon emissions, natural gas is increasingly favored. In 2024, the market is projected to reach 430.2 USD Billion, reflecting a growing reliance on natural gas for power generation and heating. This trend is further supported by government policies promoting natural gas usage, which may lead to expanded storage capacities to accommodate fluctuating demand.

The integration of renewable energy sources into the energy mix is influencing the Global Underground Natural Gas Storage Market Industry. As renewable energy generation, such as wind and solar, becomes more prevalent, the need for reliable backup sources like natural gas storage increases. Natural gas can effectively complement intermittent renewable sources, ensuring a stable energy supply. This synergy is likely to drive investments in underground storage facilities, as they provide the necessary flexibility to balance supply and demand, thereby enhancing the overall resilience of the energy system.

Geopolitical dynamics significantly impact the Global Underground Natural Gas Storage Market Industry, as nations seek to bolster their energy security amid fluctuating global energy markets. Tensions in key gas-producing regions can lead to supply disruptions, prompting countries to invest in underground storage as a strategic buffer. This proactive approach not only mitigates risks associated with supply volatility but also supports domestic energy independence. Consequently, the market is expected to grow as countries prioritize the establishment of robust storage infrastructures to safeguard against geopolitical uncertainties.

The Global Underground Natural Gas Storage Market Industry benefits from supportive regulatory frameworks that encourage the development and expansion of underground storage facilities. Governments worldwide are implementing policies aimed at enhancing energy security and ensuring a stable supply of natural gas. These regulations often include incentives for infrastructure investments and streamlined permitting processes. As a result, the market is likely to see increased investments in storage capabilities, which could contribute to the projected growth from 430.2 USD Billion in 2024 to 604.0 USD Billion by 2035, indicating a robust CAGR of 3.13% from 2025 to 2035.

Innovations in technology are playing a crucial role in the Global Underground Natural Gas Storage Market Industry, enhancing the efficiency and safety of storage operations. Advanced monitoring systems, improved drilling techniques, and better geological assessments are enabling operators to optimize storage capacity and reduce operational risks. These advancements not only improve the reliability of gas supplies but also lower costs associated with storage. As technology continues to evolve, it is anticipated that the market will attract further investments, thereby supporting the overall growth trajectory of the industry.

By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American underground natural gas storage market will dominate this market due to the increasing exploration and production of natural gas and hydrogen in the Region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Underground Natural Gas Storage Market Share By Region 2022 (%)

Source: Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

Due to government assistance, Europe's Underground Natural Gas Storage market accounts for the second-largest market share. It has greatly influenced the demand for natural gas, encouraging the natural gas storage industry. Further, the German Underground Natural Gas Storage market held the largest market share, and the UK Underground Natural Gas Storage market was the fastest-growing market in the European Region.

The Asia-Pacific Underground Natural Gas Storage Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to developing economies in the Region.Moreover, China’s Underground Natural Gas Storage market held the largest market share, and the Indian Underground Natural Gas Storage market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the Underground Natural Gas Storage market grow even more. Market participants are also undertaking various strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The underground natural gas storage industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the Underground Natural Gas Storage industry to benefit clients and increase the market sector. The Underground Natural Gas Storage industry has offered some of the most significant environmental advantages in recent years. Major Underground Natural Gas Storage market players, including McDermott (US), NAFTA a. s. (Slovakia), TC Energy Corporation (Aberta), Royal Vopak (Netherlands), Chart Industries (Georgia), Uniper SE (Germany), ENBRIDGE Inc (Canada), and others are attempting to increase market demand by investing in research and development operations.

Enbridge Inc. is a multinational pipeline and energy company headquartered in Calgary, Alberta, Canada. Enbridge owns and operates pipelines throughout Canada and the United States, transporting crude oil, natural gas, and natural gas liquids. ENBRIDGE INC. announced that it has entered into a purchase agreement with EnCap Flatrock Midstream to acquire Moda Midstream Operating, LLC. The acquisition will significantly advance the company's US gulf coast export strategy and connectivity to low-cost and long-lived reserves.

Uniper SE is an energy company based in Düsseldorf, Germany. The company's name is a portmanteau of "unique" and "performance" given by long-term employee Gregor Recke. Uniper was formed by separating E.ON's fossil fuel assets into a separate company that began operating on 1 January 2016. Uniper SE has announced they will work together as a strategic partnership.