Abstract: So far underground gas storage is internationally recognized as the most economical and effective method for seasonal peak shaving of natural gas. The construction progress of underground gas storages is slow in China, and the deficiency of gas storage and peak shaving capacity has become a bottleneck factor to restrict the development of natural gas in China. Based on this, the development status of underground gas storages in China was combed, and the development characteristics, demand and direction of natural gas industry were analyzed. Then, the opportunities and challenges to underground gas storage development in China were summarized based on the experience of underground gas storage development in Europe and the United States, combined with China's current industrial policies. Finally, it was proposed that governments, enterprises and the public shall make great efforts to construct the market-oriented construction and operation mechanism, improve the natural gas supply, storage and distribution system so as to establish a benign natural gas development mechanism.