Storage Offered as Capacity Substitute
A proprietary storage technology developed by a Houston-based
firm could "obviate" the need in the short term for some of the
pipeline capacity additions that have been proposed to meet the
power generation-fueled growth in gas demand anticipated for the
Northeast market, says a company official.
The trademark technology, Salternatives, would upgrade the
deliverability capabilities of storage facilities in depleted gas
fields, which typically are low due to their higher volumetric
capacities, to match high-performance salt caverns that are used to
meet peak gas demand requirements, contends John F. Thrash,
president and CEO of eCorp, a developer of high-deliverability gas
storage facilities. It would do this with less environmental impact
and at lower construction costs than those required for salt-cavern
storage facilities and new pipelines, he said.
Although not a panacea, he believes the new technology could go
a long way towards boosting the efficiency and utilization rates of
existing pipelines serving the Northeast market, thus mooting the
need for new greenfield pipeline capacity to the Northeast - at
least for the immediate future. "It does not obviate forever the
need for new long-haul pipe," he said..
The company plans to use the new technology at its Stagecoach
Gas Storage Project near Binghamton, NY, which currently is in the
developmental stage. Assuming Stagecoach receives approval from
FERC, it could eliminate the need for "significant long-haul
pipeline capacity additions" and some expansions that are proposed
for construction "west" of the planned storage field, Thrash said.
Stagecoach would do this by "greatly enhanc[ing]" the ability of
existing Northeast pipelines such as Columbia, Tennessee Pipeline's
300 Line, Transcontinental Gas Pipe Line's Leidy Line and CNG
Transmission's system to better serve the downstream market, he
noted. "There is an intrinsic underutilization of all of those
pipes...They even testified at the [FERC conference last week] that
they're not running at 100% load factor on average, and there are
moments in time when they are way below average. And so this is an
opportunity to use that unused capacity."
Thrash, who was a panelist at the public conference on Northeast
gas demand, believes that construction of a north/south pipeline
header to connect the Stagecoach field to these pipelines is an
option the Commission should weigh as it examines the future
capacity needs of the regional market. "I think it's worth looking
at because of the cost savings involved. The cost of the header -
let's say 80 miles of pipe at $1 million a mile - would be far less
than the cost of Millennium and all those other proposed projects."
He noted eCorp has been engaged in discussions with the
pipelines, all of whose systems would be in "close proximity" to
Stagecoach, about the storage project, its ability to improve their
systems' performances and its potential impact on their expansion
plans. Their reaction has been "positive" so far, according to
Thrash. "I think that we're going to connect to Tennessee and
Transco for sure. We're very geared [for] further dialogue with
If FERC gives the go-ahead to Stagecoach, he thinks that then
could cancel out the need for the entire western portion of the
Columbia Energy-sponsored Millennium Pipeline. Instead of
originating at Lake Erie, as was proposed originally, he said a
better starting point for Millennium might be the Stagecoach field.
Absent the western half, Thrash cited alternative ways to bring in
cheaper Canadian gas to eastern U.S. markets. "I think that you
could increase deliveries from the western Canadian Basin through
Niagara with some improvements to the Tennessee and CNG systems up
there. Then bring the gas on down, aggregate it here [Stagecoach],
and stage it for delivery [through] expanded systems going east."
The proposed storage project also "creates a means to transfer
Leidy storage volumes to Stagecoach," which would help to
debottleneck the constrained Leidy Line going eastward, Thrash
noted. This again would "obviate" the need for the pipeline
projects or portions of projects that would be to the "west" of the
However, Thrash stressed there still would be a definite need
for capacity expansions - via looping or compression - on the
portions of pipeline systems situated east of Stagecoach "to
accommodate both the peak and long-term delivery capabilities" of
the storage field in meeting the needs of downstream consumers. He
pointed to the "rehabilitation" of Columbia's A-5 Line and possible
looping on Tennessee's 300 Line as examples.
A key feature of the proposed Stagecoach field would be its
quick turnaround time, which would enable pipes to respond to the
demands of power generators, he said. "We will be able to go from
injecting 500 MMcf/d to withdrawing 500 MMcf/d in 30 minutes...The
fact that you can reverse flows within less than an hour's time is
conducive to providing no-notice, load-following service" to
satisfy generators' daily and hourly peaking needs.
Initially, the Stagecoach storage field would have a working gas
capacity of 10-12 Bcf, with withdrawal rates of up to 300 MMcf/d.
Depending on market conditions, the field could be expanded to 20
Bcf of working gas capacity, with delivery capabilities of up to
600-800 MMcf/d, according to Thrash. He said a certificate
application for the storage project is likely to be submitted to
FERC early this fall. If the Commission gives its blessing, he
estimated it would take about a year to complete work on
eCorp's affiliate, Central New York Oil and Gas Co. (CNYOG),
owns 100% of the leasehold interests, as well as in excess of 75%
of the gas storage rights, in the two producing reservoirs that
would be converted into the Stagecoach storage field. It is
continuing to acquire the remaining storage rights, Thrash said.
Also, CNYOG is conducting all of the environmental surveys and is
preparing the environmental reports required by FERC.