The Mountaineer NGL Storage project, the first new subsurface NGL storage project in the Marcellus/Utica shale region, is on hold, waiting for regulatory approval. The parent company, Energy Storage Ventures LLC (ESV) was formed in 2016 to develop, construct, and operate a natural gas liquids (NGLs) facility on 200 acres in the Ohio River valley region in the Salina salt formation. Part of the project was initially to be in service this year, but has been pushed back to 2019.
David Hooker, president of ESV indicated the regulatory approval process is taking longer than expected, as several state agencies are involved, such as Ohio Department of Natural Resources (ODNR), Environmental Protection Agency and Department of Transportation. ODNR oversees the oil and gas development and mining, and the concept of storing NGLs in salt caverns is relatively new to the state, thus more consideration is given to migration possibilities. NGL salt storage caverns require large brine ponds matching the facility’s capacity to use as balance pressure when injecting and withdrawing the products out of the ground.
In 2012, a shallower hard rock storage facility in southwest Ohio was closed due to mechanical integrity issues that occurred after a propane leak. Along with the Rover Pipeline issues in the state, Hooker feels these have added to the delays in permits. Spokesman Steve Irwin for ODNR declined to discuss why the process is taking so long, but did state that only the application for a Class III solution mining well is pending. No timeline for completions of the review of the application’s technical aspects was indicated.
The Salina formation is about 6,700 feet underground, between the Marcellus and Utica shale formations. Migration issues may be a concern, especially in an area where there is high production activity. Over $5 million has been spent by Mountaineer on technical validation for a test well, core samples, and seismic tests to help build a state-of-the art facility that has confirmed salt and safe cavern operations.
With the Shell ethane cracker plant in western Pennsylvania and four other facilities proposed the need for NGL storage in the Appalachian Basin is economically important. The US Department of Energy issued a Natural Gas Liquids Primer with a focus on the Appalachian Region in late 2017. West Virginia University release a study showing how the Ohio-Pennsylvania-West Virginia region can support storage facilities. A webinar featuring this study will be held January 15th at 1:00 PM ET.