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Ohio NGL storage site would benefit West Virginia, officials say


The State Journal

CLARINGTON, Ohio — Mountaineer NGL Storage said Thursday it’s planning to invest $150 million over the next three to five years in an Appalachian storage facility. The company also said that if market demand is strong enough, its total private investment could top $500 million.

Mountaineer NGL Storage Managing Director David Hooker said support for the regional effort has been strong, “and we believe that the Mountaineer NGL Storage Project highlights how the private sector can take steps to address critical storage solutions for the burgeoning petrochemical industry.” Hooker said company officials think the investment “will encourage significant additional NGL infrastructure support in the region, as well.”

Hooker said the project is still in the planning stages, pointing out the company has worked with state officials on permitting, “and at least we have a path forward.”

“Our expectation is we should see our permits sometime in the first or second quarter next year,” he said. “We should be able to begin construction at that point.”

Royal Dutch Shell is preparing to start construction of a $6 billion ethane cracker in Western Pennsylvania, while Thai-based PTT Global is due to decide by the end of the year if it will proceed with a proposed cracker in nearby Dilles Bottom, Ohio, about 20 miles from Clarington.

Shale resources in the three states — Ohio, Pennsylvania and West Virginia — are said to be vast enough to support development of as many as five crackers, with a projected storage need of at least 2 million barrels per cracker.

Hooker said Mountaineer NGL’s underground storage project isn’t contingent on a storage deal with either cracker plant, though “that would be the holy grail for us.”

“We’d love that. We have had a lot of dialogue with PTT Global, also with Shell and several other strategics,” he said. “But (what we do) isn’t contingent on PTT Global. We believe there’s certainly enough market out there to support this project, so PTT Global would be the icing on the cake.”

Hooker said the company plans to create salt caverns nearly 7,000 feet underground to store propane, butane and ethane. Phase I would store about 2 million barrels, with Phase II, subject to demand, adding another 1.2 million barrels.

Identifying underground storage for high-value natural gas liquids has been a priority for the Tri-State Shale Coalition, a cooperative venture among Ohio, Pennsylvania and West Virginia. The group had commissioned a study of geological formations in the tri-state area to determine where those opportunities might be.

WVU Energy Institute Director Brian Anderson, author of that study, said he was “excited to see the progress that Mountaineer NGL is making towards constructing NGL storage in Appalachia.”

“The build-out of storage and a robust pipeline network creating connectivity between industrial sites are critical components of the infrastructure that we need to develop in our region to support the rebirth of the Appalachian chemical and polymers industry,” Anderson said.

Ann Blankenship, W.Va. Oil and Natural Gas Association executive director, called the announcement “great news for West Virginia.”

“The Mountaineer NGL Storage Project is centrally located to an existing pipeline network that can both deliver ethane to storage and withdraw it and deliver it to markets that need it now and in the future,” Blankenship said. “As additional consumers of ethane and propane locate or expand in West Virginia, Mountaineer NGL will be ready to serve their needs. We are excited for the petrochemical industry to expand business in West Virginia and for the incredible Marcellus and Utica Shale resource to reach its full potential for the citizens of our state. Mountaineer NGL’s continued investment in its storage project will help us meet that objective.”

Shawn Bennett, executive vice president of the Ohio Oil and Gas Association, said natural gas liquids storage is critical to advancing the Appalachian Basin into a premiere petrochemical hub that will attract thousands of well-paying manufacturing jobs to the region.

“Oil and gas development is only the first phase in the economic renaissance of the Appalachian region,” he said. “As we enter the second phase of attracting manufacturing jobs that benefit from this important feedstock, we need projects like Mountaineer NGL Storage to offer a continuous supply of natural gas liquids to the Shell petrochemical complex and other potential announced projects in order to maximize this generational opportunity.”

U.S. Rep. David McKinley, R-W.Va., said Mountaineer NGL’s investment “will ensure the Appalachian Region becomes a major player in the petrochemical industry.”

“With a new ethane cracker plant coming to the area and our abundant supply of natural gas, investments like this will create thousands of good-paying jobs, spark new private investment and bring billions of dollars in new revenue to the region,” he said. “These projects are a top priority that will help America reclaim the mantle of leadership in energy production on the world stage.”

Staff writer Linda Harris can be reached at 304-374-0403 or email [email protected]
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