Montana Gas Storage Agreement and Lease (Surface and Underground) — Explained A Montana Gas Storage Agreement and Lease (Surface and Underground) is a legal contract that governs the rights and obligations of parties involved in the storage of natural gas in underground reserves located in the state of Montana. This comprehensive agreement outlines the terms and conditions under which the gas storage facility can be operated, leased, and constructed on both the surface and underground levels. Keywords: Montana, gas storage agreement, lease, surface, underground 1. Key Elements of a Montana Gas Storage Agreement and Lease: — Parties Involved: The agreement identifies the entities or individuals involved in the contract, including the lessor (landowner or facility owner) and the lessee (storage facility operator or developer). — Lease Term and Renewal: The agreement specifies the duration of the lease, including the start and end dates, and any provisions for renewal or extension of the lease term. — Rights and Obligations: It outlines the rights and obligations of both parties, such as the lessee's right to store natural gas in the underground reserves and the lessor's right to receive lease payments. — Scope of Storage Facility: The agreement defines the boundaries and capacity of the storage facility, including the amount of natural gas that can be stored and withdrawn. — Access and Use: It provides provisions for access to the property, construction of storage infrastructure, and operations, ensuring both parties have a clear understanding of their rights and responsibilities. — Lease Payments and Royalties: The agreement outlines the financial terms, including lease payments to be made by the lessee to the lessor for the use of the property and any royalties or revenue sharing arrangements based on gas storage and extraction. — Insurance and Liability: It addresses insurance requirements, indemnification, and liability concerns to protect all parties involved. — Environmental and Regulatory Compliance: The agreement ensures compliance with relevant environmental laws, regulations, and permits pertaining to gas storage operations and any potential environmental impacts. 2. Types of Montana Gas Storage Agreement and Lease (Surface and Underground): — Renewable Lease: This type of lease allows for the possibility of renewing the lease after the initial term expires, typically granting the lessee the option for extension based on certain conditions. — Compensatory Lease: A compensatory lease involves the exchange of something of value, such as cash payments or other considerations, for the rights to store natural gas in the underground reserves. — Prepaid Lease: In a prepaid lease, the lessee pays the full lease amount upfront, usually as a lump sum, in exchange for the right to store gas during the agreed-upon lease term. — Fixed Term Lease: A fixed-term lease establishes a specific period during which the lessee has the right to use the gas storage facility, usually without any option for renewal unless specified otherwise. In conclusion, a Montana Gas Storage Agreement and Lease (Surface and Underground) is a legal contract that regulates the terms, rights, and obligations related to the storage of natural gas in underground reserves in Montana. It covers elements such as the lease term, rights and obligations of the parties, financial considerations, compliance with regulations, and different types of leases available.
Montana Gas Storage Agreement and Lease (Surface and Underground)
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The most important type of gas storage is in underground reservoirs. There are three principal types ? depleted gas reservoirs, aquifer reservoirs and salt cavern reservoirs.
Base gas (or cushion gas) is the volume of natural gas intended as permanent inventory in a storage reservoir to maintain adequate pressure and deliverability rates throughout the withdrawal season. Working gas capacity refers to total gas storage capacity minus base gas.
The working gas volume (WGV) is the amount of natural gas that can be injected, stored and withdrawn during the normal commercial operation of a natural gas storage facility.
Natural gas, like most other commodities, can be stored for an indefinite period of time. The exploration, production, and transportation of natural gas takes time, and the natural gas that reaches its destination is not always needed right away, so it is injected into underground storage facilities.
Base gas: The quantity of natural gas needed to maintain adequate reservoir pressures and deliverability rates throughout the withdrawal season. Base gas usually is not withdrawn and remains in the reservoir. All natural gas native to a depleted reservoir is included in the base gas volume.
How is Natural Gas Stored? Natural gas is stored underground primarily in three reservoir types: depleted oil and natural gas fields, salt formations and depleted aquifers. Natural gas may also be stored above ground in refrigerated tanks as liquefied natural gas (LNG).
While natural gas is composed of mainly methane (which is made from a majority of hydrogen), gasoline is composed of carbon compounds. Both come from inside the earth, but methane is found in natural reserves while carbon compounds come from crude oil.
Depleted natural gas or oil fields function as gas storage reservoirs in California. Natural gas is injected into the storage reservoirs through gas storage wells and stored until withdrawn for use. There are 12 underground natural gas storage fields in the state.