AbstractThe British Gas Corporation is preparing for substantial capital expenditure to provide additional gas storage capacity, which is required to balance out the within-day variations of demand, Conversion to natural gas, with its higher calorific value, resulted in a substantial increase in the effective volume of gas storage available. This surplus has been eroded by the rapid growth in demand over the decade since conversion, and new investment in storage will be required if current forecasts of growth are correct. The assessment of the storage requirements has therefore become more important, and more sophisticated methods are being developed. In this paper the factors affecting the need for storage are examined, the methods adopted in incorporating these factors into a simulation model are discussed, and the results from the models are presented. Consideration is given to the national policy aspects of the problem and to the interactions between O.R. and other staff within B.G.C. during the development of the project.