A proprietary storage technology developed by a Houston-basedfirm could “obviate” the need in the short term for some of thepipeline capacity additions that have been proposed to meet thepower generation-fueled growth in gas demand anticipated for theNortheast market, says a company official.

The trademark technology, Salternatives, would upgrade thedeliverability capabilities of storage facilities in depleted gasfields, which typically are low due to their higher volumetriccapacities, to match high-performance salt caverns that are used tomeet peak gas demand requirements, contends John F. Thrash,president and CEO of eCorp, a developer of high-deliverability gasstorage facilities. It would do this with less environmental impactand at lower construction costs than those required for salt-cavernstorage facilities and new pipelines, he said.

Although not a panacea, he believes the new technology could goa long way towards boosting the efficiency and utilization rates ofexisting pipelines serving the Northeast market, thus mooting theneed for new greenfield pipeline capacity to the Northeast – atleast for the immediate future. “It does not obviate forever theneed for new long-haul pipe,” he told NGI.

The company plans to use the new technology at its StagecoachGas Storage Project near Binghamton, NY, which currently is in thedevelopmental stage. Assuming Stagecoach receives approval fromFERC, it could eliminate the need for “significant long-haulpipeline capacity additions” and some expansions that are proposedfor construction “west” of the planned storage field, Thrash said.

Stagecoach would do this by “greatly enhanc[ing]” the ability ofexisting Northeast pipelines such as Columbia, Tennessee Pipeline’s300 Line, Transcontinental Gas Pipe Line’s Leidy Line and CNGTransmission’s system to better serve the downstream market, henoted. “There is an intrinsic underutilization of all of thosepipes…They even testified at the [FERC conference last week] thatthey’re not running at 100% load factor on average, and there aremoments in time when they are way below average. And so this is anopportunity to use that unused capacity.”

Thrash, who was a panelist at the public conference on Northeastgas demand, believes that construction of a north/south pipelineheader to connect the Stagecoach field to these pipelines is anoption the Commission should weigh as it examines the futurecapacity needs of the regional market [See related story]. “I thinkit’s worth looking at because of the cost savings involved. Thecost of the header – let’s say 80 miles of pipe at $1 million amile – would be far less than the cost of Millennium and all thoseother proposed projects.”

He noted eCorp has been engaged in discussions with thepipelines, all of whose systems would be in “close proximity” toStagecoach, about the storage project, its ability to improve theirsystems’ performances and its potential impact on their expansionplans. Their reaction has been “positive” so far, according toThrash. “I think that we’re going to connect to Tennessee andTransco for sure. We’re very geared [for] further dialogue withCNG.”

If FERC gives the go-ahead to Stagecoach, he thinks that thencould cancel out the need for the entire western portion of theColumbia Energy-sponsored Millennium Pipeline. Instead oforiginating at Lake Erie, as was proposed originally, he said abetter starting point for Millennium might be the Stagecoach field.Absent the western half, Thrash cited alternative ways to bring incheaper Canadian gas to eastern U.S. markets. “I think that youcould increase deliveries from the western Canadian Basin throughNiagara with some improvements to the Tennessee and CNG systems upthere. 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 transferLeidy storage volumes to Stagecoach,” which would help todebottleneck the constrained Leidy Line going eastward, Thrash toldNGI. This again would “obviate” the need for the pipeline projectsor portions of projects that would be to the “west” of theStagecoach header, he said.

However, Thrash stressed there still would be a definite needfor capacity expansions – via looping or compression – on theportions of pipeline systems situated east of Stagecoach “toaccommodate both the peak and long-term delivery capabilities” ofthe storage field in meeting the needs of downstream consumers. Hepointed to the “rehabilitation” of Columbia’s A-5 Line and possiblelooping on Tennessee’s 300 Line as examples.

A key feature of the proposed Stagecoach field would be itsquick turnaround time, which would enable pipes to respond to thedemands of power generators, he said. “We will be able to go frominjecting 500 MMcf/d to withdrawing 500 MMcf/d in 30minutes…..The fact that you can reverse flows within less than anhour’s time is conducive to providing no-notice, load-followingservice” to satisfy generators’ daily and hourly peaking needs.

Initially, the Stagecoach storage field would have a working gascapacity of 10-12 Bcf, with withdrawal rates of up to 300 MMcf/d.Depending on market conditions, the field could be expanded to 20Bcf of working gas capacity, with delivery capabilities of up to600-800 MMcf/d, according to Thrash. He said a certificateapplication for the storage project is likely to be submitted toFERC early this fall. If the Commission gives its blessing, heestimated it would take about a year to complete work onStagecoach.

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 thatwould be converted into the Stagecoach storage field. It iscontinuing to acquire the remaining storage rights, Thrash said.Also, CNYOG is conducting all of the environmental surveys and ispreparing the environmental reports required by FERC.

Susan Parker

©Copyright 1999 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.