The fair value of the Bergermeer gas storage SBU

22 April 2015

Gas storage: what is a fair value?

At the Flame conference 2015 KYOS presented an assessment of the fair value of the Bergermeer gas storage facility. Short background: TAQA Gas Storage is operating this facility in the Netherlands. The Bergermeer unit is an underground gas storage facility with a capacity of 46 TWh (4.1 billion cubic metres), and is the largest open-access gas storage facility in Europe.

Valuation of Bergermeer Gas Storage

The value of a gas storage depends on various factors, including

  • Winter-summer spread
  • Volatility
  • Balancing benefits
  • Other factors (e.g. Financing, Market liquidity and Reliability of storage service)

In this case-study for the Bergermeer gas storage facility, KYOS calculated a fair multiplier of 2.38 (based on the forward curve of 31 March 2015). We calculated the value with our KyStore valuation model. Moreover, based on historical data for the years 2012, 2013 and 2014, KYOS demonstrated that the estimated value is a good indicator for the value which can be realized in the market.

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