Not separating liquids from the natural gas stream pulled from the Marcellus and Utica Shale plays in Pennsylvania, Ohio, West Virginia and Kentucky for lack of a market and storage capacity is like “cooking breakfast with $100 bills.”
“It really is a crime,” according to Brian J. Anderson, director of the WVU Energy Institute at West Virginia University. Anderson was part of a three-person panel discussing natural gas liquids storage in the Appalachian Basin at the recent Special Institute on Petrochemicals, presented by the Energy & Mineral Law Foundation, held in Pittsburgh.
With Shell Chemical hard at work raising iron and installing hundreds of miles of pipe to construct its ethane cracker roughly 35 miles northwest of Pittsburgh, underground storage for natural gas liquids is considered the petrochemical industry’s “next big thing” in Appalachia.
Anderson told the audience, comprised primarily of attorneys involved in energy, the basin is producing roughly 400,000 barrels per day of ethane, with the Shell cracker needing roughly 100,000 BPD of the liquid when it comes online in the 2022 timeframe.
Intermediate storage of NGLs is necessary since produced volumes typically exceed the pipeline takeaway capacity and processing capacity. Large volumes of NGLs are typically stored as a pressurized liquid in underground caverns, according to Anderson and Steven B. Hedrick, president and CEO of the Mid-Atlantic Technology, Research and Innovation Center (MATRIC).
“Through 2040, there will be growth in the volume of NGLs, Hedrick said. “The lowest priced ethane on Earth is in Appalachia.”
Both Anderson and Hedrick are involved in the Appalachian Storage Hub, or ASH, a multi-billion-dollar NGL hub project that is expected to be built along the Ohio River.
Hedrick is CEO of the Appalachian Development Group, which is heading up the massive project, including securing public and private funding.
“It’s like building the International Space Station below ground,” according to Anderson.
The storage hub received a huge monetary boost just days into 2018, when it received approval for the first of two application phases for a $1.9 billion U.S. Department of Energy loan.
“We’re also talking with people around the world to secure a $1.4 billion equity pool, Hedrick told the Energy & Mineral Law Foundation audience.
“We also have name-brand companies that are interested in doing the work (constructing the storage hub),” Hedrick said.
The trade association American Chemistry Council has projected the storage hub could attract up to $36 billion in new chemical and plastics industry investment, and create 100,000 new jobs in the basin.
https://www.shaledirectories.com/blog/ngl-storage-hub-stops-appalachia-crime/
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