For nearly a decade, Steve Hedrick and his colleagues have been trying to make a natural gas liquids (NGL) storage hub in the Appalachian Basin a reality. Those efforts came one step closer to fruition on Wednesday.

Hedrick serves as the CEO of a little-known company called Appalachia Development Group LLC (ADG). The U.S. Department of Energy (DOE) on Wednesday invited the company to submit a Part II application for a $1.9 billion loan guarantee that, if approved, would support ADG’s Appalachia Storage & Trading Hub project. The loan guarantee would hedge a lender’s risk by ensuring that the federal government pays back the money if ADG or another company defaults.

Hedrick told NGI’s Shale Daily that ADG is prepared to move “forward with the project to drive it to its logical conclusion, up to and including construction and operation.”

ADG wants to build a series of underground NGL storage facilities and related pipeline infrastructure in West Virginia’s Ohio and Kanawha river valleys. Hedrick said the hub could eventually be expanded into Kentucky, Ohio and Pennsylvania, as well.

“Plans have in fact been made” for ADG’s project sites, he said. But “it is premature to discuss specific prospective sites until further detailed engineering has been completed. In all, ADG is trying to raise more than $3 billion for the project. In addition to a $1.9 billion loan, the company wants to raise $1.4 billion of additional equity from financial and strategic investors.

“It will increase the probability of American energy dominance by releasing the potential of the Marcellus, Utica and Rogersville shale methane deposits for both domestic consumption and international consumption by America’s allies,” Hedrick said of his vision for the hub.

ADG, formed last year to pursue the storage hub, is owned by the Mid-Atlantic Technology, Research & Innovation Center (MATRIC) and the West Virginia University Innovation Corporation (WVUIC). Hedrick is also the CEO of MATRIC, a nonprofit research corporation that specializes in chemical, engineering and software technologies. The WVUIC is also an independent nonprofit applied research corporation that provides services for the government and industry customers.

After ADG made its announcement, which is the first of several steps in a long process to secure a conditional commitment from the government and a final loan agreement. West Virginia Gov. Jim Justice said it was another “major step toward expansion” of the state’s petrochemical industry.

A unit of Royal Dutch Shell plc is currently building a multi-billion dollar ethane cracker in Western Pennsylvania that’s expected to come online next decade. Four other similar facilities have been proposed for the region, including one by Thailand’s state-owned petrochemical and refining company, PTT Global Chemical pcl. PTT is expected to make a final investment decision on a world-scale ethane cracker in Belmont County, OH, this year.

Proponents of an NGL storage hub want to link up Appalachian shale formations with a network of pipelines, equipment and underground storage that could ease supply and demand imbalances and help create more regional buyers and sellers of the commodities — similar to the one that exists in Mont Belvieu, TX, on the Gulf Coast. Momentum in the region has been building, with a major study recently completed that identified a number of limestone and sandstone formations in Appalachia, along with salt strata, that would be ideal for underground NGL storage.

Another project to the north of ADG’s, Mountaineer NGL Storage LLC, is targeting an in-service date of 4Q2018 for part of its 3.25 million bbl underground facilities in Monroe County, OH. Sources have said, however, that Mountaineer is running into permitting delays with state regulators that are unfamiliar with that kind of infrastructure.

“We just want to make sure these facilities get built. If you’re looking at the marketplace for producers in the Northeast, infrastructure constraints are probably the biggest problem we have,” said Thomas Stewart, who sits on the Ohio Oil and Gas Association’s board. “We need stuff being built here that absorbs this production, and I’d just assume that it has a positive impact on Ohio, Pennsylvania and West Virginia rather than down in Texas. Our view is just get her done.”

A Pennsylvania-commissioned study released last year found that the Marcellus and Utica shales hold enough ethane to accommodate up to four more ethylene crackers in addition to Shell’s. But the analysis also found that the region needs 3.5-7 million bbl of liquids storage to foster that kind of development. Stewart added that more than one underground facility would likely have to be built by other developers as a result.

MATRIC is headquartered in South Charleston, WV, at the former global research headquarters of Union Carbide, which was acquired by the Dow Chemical Co. in 2001. More than 150 doctorate-level researchers and 900 other degreed staff were released in the four years following that merger. To stave-off “brain drain” in the region, MATRIC was founded in 2003 to preserve the innovation of what was once West Virginia’s Chemical Valley.

Appalachian shale production has helped drive a renaissance of sorts in that kind of thinking and even revitalized parts of the economy throughout the Rust Belt. WVUIC was formed in 2015 to help private industry in the region.

West Virginia Sens. Shelley Moore Capito and Joe Manchin, along with Rep. David McKinley have all introduced or promoted legislation to advance an Appalachian storage hub. They hailed the announcement.

Capito said it was “a clear indication” of the strength of ADG’s application, and demonstrated DOE’s “interest in the transformative job creation and economic growth potential of developing an Appalachian market for natural gas liquids.”

The basin is home to abundant natural gas storage and has long been a staging area to move gas to the Northeast. But its NGL infrastructure is largely inadequate. There is no underground liquids storage of the kind currently under development by ADG, Mountaineer and others.

Beyond the loan application, Hedrick said ADG is focused on securing funding and moving forward with the permitting, engineering and commercial agreement phases of the project.