NGI The Weekly Gas Market Report / NGI All News Access

Storage Technology May Moot Need for Northeast Pipe Projects

Storage Technology May Moot Need for Northeast Pipe Projects

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 told NGI.

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 [See related story]. "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 CNG."

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 told NGI. This again would "obviate" the need for the pipeline projects or portions of projects that would be to the "west" of the Stagecoach header, he said.

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 Stagecoach.

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.

Susan Parker

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus