WOODSFIELD — The plan to store natural gas liquids in underground salt caverns along the Ohio River, about 12 miles south of a proposed ethane cracker plant in the Dilles Bottom area of Shadyside, may soon become a reality.
David Hooker, president of Mountaineer NGL Storage and the parent company of Denver-based Energy Storage Ventures, told the Monroe County Commissioners Monday that all permits have been approved and construction could begin the first quarter of next year.
“It’s been a long time coming,” he said.
My guess is that this means they’ve resolved a contract with a user, stated Bryce Custer, principal of NAI Ohio River Corridor. “I’d guess that this solidifies the PTTGC pending FID announcement.”
Hooker updated Commissioners Carl Davis, Tim Price and Mick Schumacher on the plans for the project and its value to the potential cracker plant.
“There’s been a lot of discussion about this Appalachian storage hub,” he said. “What we’re trying to do is build a storage facility because we think it’s needed. We think it’s important to everything that’s going on out here in terms of what can be for this valley, meaning more industry back here. Rather than (sending) it to the coast and ship it out of here, let’s keep it. That’s what storage does.”
He said plans have been ongoing since 2013 and storage is the final stage of the production process.
“We think you’re right in the heart of it,” he said.
“Salt is the safest and most used way of storing liquid hydrocarbons in the country. There’s over a billion barrels of it in this country. We’re only talking about 3 million barrels. … It’s not very big, and it’s been going on for 70 years. You choose this stuff because it truly is the safest way to store those kind of hydrocarbons.”
Mountaineer NGL Storage is sponsored by Goldman Sachs.
Hooker added that about $27 million has already been invested in Ohio, including $9 million for right of way and mineral rights for 200 acres of land in Monroe County.
The company has also spent $6 million for technical validation such as ensuring the salt was the correct quality and depth, with methods including geo-mechanical and cavern mechanics, environmental analysis, and drilling bore holes to be certain of the ground’s stability. $12 million was also spent for engineering and permitting for Westlake Construction, administrative costs and other expenses.
“What ODNR has required us to do in the way of that impoundment is unlike anything that’s every been built in this country,” he said. “They did not want to see anything happen to this thing.”
Hooker said the company intends to invest an additional $180,000.
“We’re going to take this to well over $200 million to get that first phase built out here,” he said.
The first phase would call for 1.5 million barrels stored in three caverns at about a half-million barrels per cavern, 6,700 feet underground.
“We’re talking about three different product lines. We’ve got a 12-inch (and 12-mile) ethane line, hopefully to PTT Global should that plan go forward,” he said, adding that a 10-inch ethane line will also connect to Blue Racer Midstream Natrium, a natural gas processing plant located on the West Virginia side of the river. The line will also connect to an eight-inch propane/butane line. A 10-inch brine line will also extend to Westlake Chemical.
“If we want to continue to build, they’ll continue to take our brine,” he said.
Hooker also spoke about the potential economic impact.
“We think we’re very important in the PTT Global plan, which is why they’re in discussions with us,” he said. “Rather than buy long haul capacity and pipelines or ship to places you might not otherwise build, you’ve got all the reliability and you’re eight miles away. … We think we’re part of the equation for much larger development down there.”
Hooker said there are three companies: the holding company Energy Storage Ventures, the Powhatan Salt Company, which mines salt and sends it across the river, and Mountaineer NGL Storage.
“We think there’s a business to be had afterward. If someone else wanted to build caverns, Powhatan Salt could provide that service for them,” he said.
He added that that the storage project would create 15 to 20 full-time jobs.
Mountaineer has proposed to build a 12-mile pipeline to direct connect storage with the possible ethane cracker plant. The pipeline route, preliminary survey work and a cost estimate have been completed.
“We think we are important to PTT Global and we’ve had a lot of discussions with them on this. I’m fairly confident that if the pipe goes forward that they’ll do something with us,” he said, adding that a survey crew is exploring possible routes. “We’ve just got to figure out what the right route is, who doesn’t want us in their back yard and who’s amenable to allowing us to build up there. Making sure that if PTT does go forward and want to do a deal with us, we have a route to get them the gas.”
In terms of brine disposal, Hooker said a pipeline would run from his facility along the river. They would bore the river, about 60 to 80 feet below the bottom of the river, and come up on the north side of the Westlake facility.
“We’ll actually cross the highway with the product lines and get onto Blue Racer property and bring it in on the east side of Highway 2 for the propane and ethane line,” he said.
Hooker said 7,000 feet of salt water line will be installed on Westlake property.
To produce three million barrels of NGL storage, about 30 million barrels of brine are produced and 90 percent will be delivered to Westlake. The remaining 10 percent will remain in a brine pond to be constructed in stages.
“Getting rid of the brine is a big issue,” Hooker said. “That brine has to go somewhere. What doesn’t work well up in this part of the world is a deep-well injection. Your rock’s way too hard. It can’t take that much brine without giving it back to you, so you need another solution. That’s the first thing we looked for when we got out here: where can we go with the brine?”
In answer to other questions from the commissioners, he said containment areas were out of the flood plain.
Hooker added that an engineer would meet with local fire chiefs and the sheriff to review safety procedures for the coming project.
written by Robert A. DeFrank