January 21, 2019 [S&P Global Platts] - Various midstream companies plan to add more than 200 Bcf of working natural gas storage capacity at 17 sites in the US over the next four years due to the rise of LNG export terminals and gas-fired power generation, according to a report released Monday.
The US is slated to add 216.5 Bcf of working gas storage through 2022 at a cost of $1.2 billion, according to a report released Monday by the UK firm GlobalData called “Underground Gas Storage Industry Outlook in North America to 2022 – Capacity and Capital Expenditure Forecasts with Details of All Operating and Planned Storage Sites Terminals.“
“The ever growing demand for natural gas in the US is driving the growth of the underground gas storage industry in the country,” said Soorya Tejomoortula, one of the study’s authors. “The proposed natural gas-fired power plants and the LNG liquefaction terminals are also aiding the underground gas storage industry growth.“
If the projects do manage to come online, it would increase total working gas capacity in the US to about 4.9 Tcf. The US Energy Information Administration currently estimates 4.7 Tcf of working gas capacity. No new significant storage fields have entered service over the past five years.
However, many of these planned projects have already faced substantial delays, so it is possible much of this additional storage capacity may not come online by 2022.
Salt Caverns
The proposed projects are scattered geographically, but the majority would involve salt-dome formations.
Unlike depleted oil and gas fields or aquifers, salt-dome facilities allow for greater flexibility in switching from injections to withdrawals. This allows players to meet peak demand periods for power generation or for delivery to LNG export terminals more easily. About 12% of all current US storage capacity is contained in salt caverns.
The largest proposed storage facilities include the:
- Magnum Gas Storage Project in Utah
- Falcon Gas Storage’s MoBay Storage Hub in Alabama
- Chestnut Ridge Storage’s Junction Natural Gas Storage facility in Pennsylvania
The Magnum Gas Storage Project in Goshen, Utah, would have 40 Bcf of working capacity and provide direct access to Rockies gas prices via Kern River Gas Transmission and Questar Pipeline. The salt-cavern facility would provide Rockies gas access to markets in the western US. It is latest facility to be proposed, with its initial open season taking place last summer.
Storage Delays
The MoBay Storage Hub is the largest proposed, with a 50 Bcf capacity, and would be located offshore in three substantially depleted gas reservoirs. However, this project has faced numerous delays and had an initial in-service date of October 2007, according to its initial filing with the US Federal Energy Regulatory Commission.
And the proposed Junction Storage, located in Fayette County, Pennsylvania, on the border with West Virginia, would be a 25 Bcf capacity storage facility with 500 MMcf/d of injection and withdrawal capabilities. It was first slated to enter service during the second quarter of 2018, but has yet to come online.
Another proposed salt-dome field, Multifuels’ 8 Bcf Picacho Peak facility in Arizona, was approved in 2011, but is still on hold as market conditions changed in the area.
Midstream Energy Holding’s Tallulah Gas Storage project, a 24-Bcf salt-dome facility in Madison Parish, Louisiana, was initially expected to enter full service in 2018, but has yet to come online. It received FERC approval in August 2010.
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