(Adds details, background, Byline) By Eileen Houlihan NEW YORK, Sept 12 (Reuters) - The U.S. Energy Information Administration on Wednesday said it upwardly revised peak U.S. working natural gas storage capacity by about 3.3 percent from last year's estimate. As of April 2012, EIA said demonstrated peak capacity - the sum of the highest working gas inventory level observed in each reporting facility over the last five years - climbed 136 billion cubic feet to 4.239 trillion cubic feet. EIA's report compares data from April to April. Since April 2012, EIA analysts said 7.5 bcf has been added to working gas storage capacity cited in the report, estimating that another 32 bcf could potentially be added by year-end. Most of the 136-bcf increase in demonstrated peak capacity year-over-year came in the form of more use of traditional storage in the West (56 bcf) and salt cavern storage in the Producing region (58 bcf). Salt cavern storage allows rapid injection and withdrawal to respond to market conditions and other short-term events. Demonstrated peak working natural gas in the East rose by only 14 bcf, or less than 1 percent, but the increase coincided with the rapid growth of production from the Marcellus Shale in Pennsylvania, EIA said in a separate Today In Energy report. EIA said the significance of the report is it shows the growing role of natural gas in the U.S. energy economy. "Storage operators built more storage capacity and storage holders came up with even greater volumes to put into storage. Concerns expressed early this year that there might not be enough capacity to hold the storage overhang following the warm winter plus normal summer injections should be alleviated." WHERE WILL INVENTORIES END THE BUILDING SEASON? A Reuters poll of 28 industry participants in August showed experts had reduced their estimates for end of building season inventories to below capacity limits, but most still expected storage to peak before winter at a record 3.973 tcf. A combination of blistering heat across the U.S. this summer and strong utility demand from coal to gas switching reduced the chance that inventories would hit the previous limits set by the EIA. An earlier poll showed many expected storage to end the building season at 4.109, testing the EIA's capacity and threatening to push natural gas prices into a tailspin below recent 10-year lows from April under $2 per million British thermal units. Stocks ended the inventory building season, which typically runs from April through October, at an all-time high of 3.852 tcf in November. Demonstrated peak working gas capacity relative to design capacity increased across all regions, the EIA said in Wednesday's report. "This pattern of growth occurred because growth in capacity utilization outstripped growth in capacity. This dynamic resulted in the 2012 demonstrated peak capacity in the Producing region exceeding the working gas design capacity reported last year at this time, as a significant amount of the newly available storage capacity has already found considerable usage." Working gas design capacity, or an estimate of a natural gas facility's working gas capacity as reported by the operator in the annual "Underground Gas Storage Report," represents the sum of the result across all fields. EIA said working gas design capacity increased 110 bcf in the lower-48 states year-on-year. The largest increases in working gas design capacity occurred in the Producing region, where working gas design capacity increased 52 bcf, or nearly 4 percent, since 2011. Capacity additions in the West region posted larger year-on-year increases on a percentage basis, rising nearly 7 percent, or 48 bcf, EIA said. (Reporting by Eileen Houlihan; Editing by Gerald E. McCormick and Sofina Mirza-Reid)

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