An underground natural gas liquids (NGL) storage project in Ohio has lost a key permit needed to move forward after it expired last week, forcing backers to reapply for the authorization.
Energy Storage Ventures LLC’s David Hooker, president, told NGI’s Shale Daily that the salt solution mining well permit for the Mountaineer NGL Storage project expired. However, management doesn’t “expect any problems receiving the new permit in a month or so.” He said “we plan to be in construction later this summer, so we have more than enough time” to receive the new permit.
Spokesman Adam Schroeder of the Ohio Department of Natural Resources (ODNR) confirmed that the company has reapplied for the permit, which was originally issued in 2018 and expired on March 5. ODNR does not extend permits, he added, and instead requires a new application if they expire.
Mountaineer NGL storage has continued to cope with delays. It was announced in 2016 with backing from a Goldman, Sachs & Co. investment fund and received strong interest from potential customers during a nonbinding open season to store ethane, butane and propane at a site along the Ohio River in Monroe County.
Part of the problems stemmed from the fact that state regulators were unaccustomed to the company’s application, with regulations governing the type of underground storage spread across various state agencies that led to a time-consuming regulatory process.
Gas storage is nothing new in Ohio or elsewhere in the basin, which has long been a staging ground to move volumes to the Northeast. Salt solution mining has also occurred for decades in the state, and there are currently shallower mined hard rock facilities that store refined products and NGLs in the state and across the basin. However, an NGL salt storage cavern is more complex.
Schroeder noted that the permit that expired was the only one for an underground injection well the company held. Hooker added that it was for the first of three planned wells in phase one.
Mountaineer intends to build in two stages to create storage capacity of more than 3 million bbl, which could be expanded “if the market develops.” The first phase would include three caverns in the Salina salt formation, with a capacity of roughly 500,000 bbl each. The second phase would double that.
Similar projects have been proposed for the region. More NGL storage is seen as a key to breathing life into the region’s petrochemical industry. Storage would also serve as a vital link in an NGL hub that proponents say could ease supply and demand imbalances and create more regional buyers and sellers of the commodities similar to one that exists in Mont Belvieu, TX.
While a unit of Royal Dutch Shell plc is building a multi-billion dollar ethane cracker in Western Pennsylvania, a similar project under development closer to Mountaineer NGL’s site has been slow to materialize. Affiliates of Thailand’s PTT Global Chemical pcl (PTTGC) and South Korea-based Daelim Industrial are advancing a multi-billion dollar cracker for a site in nearby Belmont County, but a final investment decision (FID) has been delayed more than once.
PTTGC spokesman Dan Williamson, however, recently told NGI’s Shale Daily that the companies are targeting an FID sometime in the first half of this year.
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