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Another Appalachian NGL Storage Project Selects EPC Contractor

Appalachia Development Group LLC (ADG), which was formed last year to build underground natural gas liquids (NGL) storage facilities in West Virginia, has selected California-based Parsons Corp. to oversee engineering, procurement and construction (EPC). 

ADG said Parsons would focus on the $3.4 billion NGL hubs’ front-end engineering and design, including project management and execution planning.

“Identifying and selecting an EPC partner is a significant milestone in our progress to develop the hub,” ADG CEO Steven Hedrick said.

Hedrick told NGI earlier this year that the company wants to build a series of underground NGL storage facilities and related pipeline infrastructure in West Virginia’s Ohio and Kanawha river valleys. He said at the time the hub could eventually be expanded in Kentucky, Ohio and Pennsylvania to serve production from the Marcellus, Utica and Rogersville shales, but he stopped short of offering further details about specific sites as detailed engineering needed to be completed.

The project cleared a hurdle in January, when the U.S. Department of Energy (DOE) invited ADG to submit a Part II application for a $1.9 billion loan guarantee that, if approved, would help support the 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. ADG said in making the EPC announcement that work is ongoing to secure another $1.4 billion equity investment.

The company added that it is working closely with the DOE on Part II of the loan guarantee application process.

Hedrick said Parsons was selected after “a rigorous review process of some of the most widely known and respected EPC companies in the country.”  Parsons is focused on the defense, security and infrastructure markets, promoting its expertise in “cyber-physical security” in work with federal, regional and local government agencies, as well as with private industrial customers worldwide.

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 largest one in the country at Mont Belvieu, TX, on the Gulf Coast.

Another project to the north of ADG’s is farther along in the development process. Goldman, Sachs & Co.-backed Mountaineer NGL Storage LLC is working on a 3.5 million bbl underground NGL storage facility in Monroe County, OH, which has been slowed by a regulatory process that is taking longer than expected.

ADG is owned by the Mid-Atlantic Technology, Research & Innovation Center, a nonprofit research corporation that specializes in chemical, engineering and software technologies, as well as the West Virginia University Innovation Corp., also an independent applied research nonprofit that provides services for the government and industry customers.

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