Trio of State Working to Develop NGL Storage Facility

The original story can be found here by Kallanish Energy

Pennsylvania, West Virginia and Ohio are working together to develop natural gas liquids storage that is needed if ethane crackers are to be developed in the Appalachian Basin, according to Denise Brinley, senior energy advisor for the Pennsylvania Department of Community & Economic Development.

Shell is building one cracker in Beaver County, Pennsylvania, and Thailand-based PTT Global Chemical is looking at building a second cracker in Ohio’s Belmont County.

The ethane comes from the Marcellus and Utica Shale plays and is a basic feedstock for plastics. The Appalachian Basin could accommodate more ethane crackers, perhaps a total of four or perhaps more, said Brinley, addressing the audience at ‘Kallanish New Horizons: Appalachian Basin.” The one-day event was presented by Kallanish Energy.

The underground NGL storage facility is unlikely to open for two to three years, according to Brinley.

The trio of states is seeking U.S. Department of Energy loans and private equity funding to build the $2.5 billion facility to store eight to 10 million barrels of NGLs, she said.

The loans would fund 60% of the project and private funding would pay for the remaining 40%, Brinley said.

The project is entering Phase 2 with the DOE paperwork expected to be submitted very soon, she said.

An earlier study has identified three potential areas in the three states where underground storage might be developed.

A private company, Mountaineer NGL Storage, is developing plans to store up to 2 million barrels of NGLs underground in southeast Ohio.

Brinley also said the three states have a new slogan to guide their energy collaboration: “The Power Region. PA-OH-WV Energy Redefined.”

It is part of a new branding effort to help the three-state region compete with the U.S. Gulf Coast in attracting energy-related investors, especially foreign, she said.

“It’s forward thinking,” she said of the branding.

The shale boom has had positive impacts in Ohio’s Belmont County and has garnered strong local support, said J.P. Dutton, president of the Belmont County commissioners.

The county is No. 1 in Ohio for shale production and could host PTT’s cracker complex.

“Good things are happening,” he said of Belmont County.

Dutton and Brinley both said some outside companies are starting to look into moving or building plastics-related facilities near the Shell cracker and the possible PTT cracker to take advantage of the polyethylene being produced by the cracker.

That interest will likely be significantly larger in 12 to 24 months, Brinley said. “It’s slow and steady. It just takes awhile” to get such deals done, she said.