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Natural Gas Storage Hub Developer Narrows List of Appalachian Sites

A group that wants to build a large storage hub for natural gas liquids in the Appalachian basin to further develop the petrochemical industry is narrowing its list of potential sites.

The Pittsburgh Business Times reported that the Appalachia Development Group made the announcement at an industry conference in November.

Appalachia Development Group has been working on a plan to bring an underground storage hub for NGLs like ethane and propane from the Marcellus and Utica shale plays to the tri-state area as the petrochemical industry continues to have interest in this area due to the abundant supply. The first cracker plant to be built outside the Gulf Coast area in 20 years is under construction in Beaver County, Pa., and a second one could be constructed in Belmont County, Ohio, where PTTGC is nearing a final investment decision and site clearing has already begun. There have been reports that ExxonMobil also is scouting the area for a site for a potential third cracker plant.

These plants take NGLs and “crack” them into the building blocks of plastics products, potentially bringing more industry to the area. A storage hub is needed to ensure a steady supply of the NGLs to the plants. A study by the Appalachian Oil and Natural Gas Research Consortium identified certain areas in Pennsylvania, West Virginia, and Ohio that has the geologic conditions needed for such storage, such as salt caverns, mined rock caverns and depleted gas reservoirs that could be used to hold NGLs.

The price tag for building the Appalachia Storage and Trading Hub and the accompanying pipelines would be about $3.4 billion. The corporation is seeking a $1.9 billion federal loan guarantee for the project from the U.S. Department of Energy, according to published reports. It is working to secure the remaining financing.

The Shell cracker plant will bring feedstock in through pipelines from Ohio and Pennsylvania, greatly reducing the need for storage. Another storage hub project being planned by Energy Storage Ventures is a facility along the Ohio River near Clarington, Ohio, using salt caverns to store propane, ethane, and butane. Each cavern could store 500,000 barrels of NGLs. It would supply the proposed PTTGC plant in Belmont County, Ohio.

The Mountaineer NGL Storage project is estimated to cost $150 million and financing is in place. Energy Storage Ventures President, David Hooker believes the project would also trigger $500 million in new pipelines in the region and $1 billion in fractionation facilities to separate NGLs.

The buildout of the petrochemical industry in Appalachia will go hand-in-hand with the development of storage fields for the raw materials, experts say.

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