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Study Finds Appalachian Basin Ripe for Underground NGL Storage

In a critical step to furthering petrochemical development in the Appalachian Basin, a team of researchers has concluded after a one-year study that there are multiple options for underground natural gas liquids (NGL) storage in various formations throughout the region.

Led by West Virginia University’s Appalachian Oil and Natural Gas Research Consortium, participants from the geological surveys in West Virginia, Pennsylvania and Ohio identified and mapped all potential options for subsurface storage. They developed an area of interest (AOI) that covers 50 counties along the Ohio River, stretching from southwest Pennsylvania all the way to the Kanawha River Valley in southern West Virginia.

The team found a variety of storage containers that could be suitable to meet the business needs of midstream companies with interest in the region. A preliminary assessment found four areas where the thickness of the Salina salt formation is more than 100 feet; multiple areas where mined-rock, such as the Greenbrier Limestone formation, occurs at depths of 1,800-2,000 feet, 12 natural gas storage fields and 66 depleted gas fields that were selected for further evaluation based on favorable characteristics.  

A further analysis led to a shortlist of 30 locations in all three states with the greatest potential for underground storage. Three areas in the Salina are situated in the northern and central areas of the AOI, while the top-rated areas in the Greenbrier are located in West Virginia. The top two natural gas storage fields and the highest ranked depleted gas reservoirs are located in West Virginia, as well.

The study also found three storage prospects in the West Virginia panhandle, another straddling southeast Ohio and southwest Pennsylvania and one in West Virginia’s Kanawha River Valley where stacked opportunities exist. Those prospects are especially beneficial for storage because various formations in one zone are more flexible in meeting the needs of different storage customers, the study said.

The research offers one of the first geologic investigations of the region’s liquids storage potential, including detailed reservoir characteristics, field level studies and rating criteria to determine the target candidates suitability. The team has also launched a website where the public and the private sector can access data.

Researchers now hope that the industry will conduct a more in-depth engineering study and ultimately construct a storage hub that includes a network of pipelines, equipment and underground supplies to serve the basin’s proposed ethane crackers and one that’s under construction by a unit of Royal Dutch Shell plc in western Pennsylvania.

The team primarily studied subsurface geology in the AOI and did not consider other important aspects involved with building underground storage, such as who owns the rights across the gas fields or whether certain acreage is prospective for natural gas production from the Marcellus and Utica shales.

The researchers began their work last year with a $100,000 grant from the Claude Worthington Benedum Foundation that was matched by Chevron Corp., EQT Corp., XTO Energy Inc., Antero Resources Corp. and several other companies with a stake in the region’s shale development.

Support has been growing in the private and public sectors for a storage hub in the region. The American Chemistry Council projected in a study released earlier this year that if five proposed ethane crackers and two propane dehydrogenation facilities are built in the region it could generate $36 billion in investments and create as many as 100,000 new jobs. Lawmakers are also pushing for federal agencies to study the feasibility of an underground storage and distribution hub in Appalachia.

Pennsylvania commissioned a study that found the Marcellus and Utica shales could accommodate up to four additional ethylene crackers beyond Shell’s facility. Mountaineer NGL Storage LLC is already trying to secure customers for a 3.25 million bbl storage facility targeting the Salina in Ohio, but the state study estimated that the region needs roughly 4-7 million bbl of liquids storage for more petrochemical development.

Interest has only peaked since Hurricane Harvey struck the Gulf Coast, affecting the nation’s petrochemical complex and reinforcing what elected officials have called for in a more geographically diversified supply chain.

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