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First Well Drilled For Massive Salt Cavern

First Well Drilled For Massive Salt Cavern

After years of litigation over what will be the largest salt cavern storage project in the Northeast, NiSource subsidiary Market Hub Partners (MHP) finally has completed its first cavern well on the Tioga Gas Storage project in northern Pennsylvania.

The Tioga project is due to commence commercial service in late 2002 or early 2003 and reach 5 Bcf of working capacity and 500 MMcf/d of deliverability by 2004. It is expected to be expanded to 15 Bcf of working capacity and 1.5 Bcf/d of deliverability over the next 10 to 15 years.

The first of 10 massive 42-inch diameter wells through the Oriskany sandstone formation to the thick salt deposits below took four months to drill and reached a total depth of 6,000 feet last week. "This is the largest well of its kind --- in terms of well-bore diameter --- north of the Tennessee border and east of the Mississippi," said NiSource Chairman Gary L. Neale. "Tioga will change the way the Northeast pipeline grid operates because it will become the largest high-deliverability gas storage facility in the Northeast Market region. It will provide the market with a just-in-time inventory of ready natural gas."

Able to quickly cycle 10 times the inventory of nearby reservoir storage facilities, the Tioga facility will provide a new type of service to a market with increasing demands for hourly flexibility and peak day needs. Tioga initially will be connected at Ellisburg, PA, to National Fuel, CNG, Tennessee, and is expected to be connected to Columbia and Transco at a later date.

"Moving Tioga towards commercial reality has been a contentious effort, but with the completion of the first well, we have fully validated the project," said Andy Lang, president of EnergyUSA's commodity business unit, which is responsible for MHP.

The project has faced stiff competition from other operators, particularly CNG Transmission and North Penn Gas, which have attempted to erect regulatory roadblocks every step of the way. CNG and North Penn own a gas storage field in the Oriskany formation directly above the salt caverns being leached for the Tioga Project. CNG has long argued that drilling 42-inch diameter wells directly through its own storage field would seriously damage its operations. However, MHP geologists and engineers were able to convince regulators the job could be done without damage to existing storage operations or the environment. CNG has appealed FERC's order, which rejected all of CNG's arguments opposing the Tioga project.

"I don't want to comment on what their arguments may be to the U.S. District Court, but I do think many of their arguments will be muted by virtue of the fact that we completed this well with no mud loss in the Oriskany and no pressure gain or loss," said Lang. "It was kind of a non-event, which we all knew it would be. People drill through other people's producing horizons all the time. It's done in the oil and gas production business routinely."

The first massive well contains 988 tons of telescoping steel tubing and 723 tons of cement surrounded by thick salt crystals, which provide a strong foundation for a high-pressure gas-delivery system. Lang said the company went through a painstaking process to monitor the drilling of the well to ensure there was no damage to the CNG/North Penn storage field. "We did pressure monitoring. We had to keep records on mud losses. We also had to drill with 26-inch casing through their field."

With the significant regulatory hurdles behind, MHP intends to move rapidly to get the project in service in time to serve growing gas-fired generation in the region.

Operations Vice President Dave Nightingale said the project will significantly change the "gas delivery picture for the Northeast. Most other traditional gas storage facilities have limited capabilities that allow them to deliver an average of 0.1 Bcf of gas per day. Once it is fully developed, Tioga will be able to deliver up to 1.5 Bcf per day."

Rocco Canonica

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