PTTGC signs deal to develop NGL storage in northeast US

HOUSTON (ICIS)–PTTGC America signed a precedent agreement that outlines the terms and conditions to develop underground natural gas liquids (NGL) storage in northeastern US. This is a critical piece of infrastructure for a proposed polyethylene (PE) complex that the company could develop in the region, it said on Wednesday.

It would be the first underground site to store ethane and other NGLs in the Marcellus and Utica shale formations of the northeast US, PTTGC said.

Under the agreement, Mountaineer NGL Storage will develop the underground salt caverns on a 200-acre (81 ha) site in Monroe county, Ohio, eight miles (13 km) south of PPTGC’s proposed petrochemical complex in Belmont county, Ohio. Mountaineer will own and operate the storage facility.

The storage facility is valued at $250m, and it will be developed in two phases by creating multiple caverns in an existing underground salt formation. Each cavern can store 500,000 bbl of material, including ethane, propane, butane and ethylene. PTTGC did not specify how many caverns will be built.

A pipeline will connect the proposed PTTGC complex to 1m bbl of ethane storage.

The first phase could store as much as 1.5m bbl of NGLs. PTTGC did not specify if this would be a mix of NGLs.

Mountaineer already has all the permits needed to start construction on the first phase, which will take two to three years to complete.

Phase two could hold another 1.5m bbl of NGLs, PTTGC said.

The facility could also be further expanded in order to meet market demand.

It is unclear whether the first phase alone would include 1m bbl of ethane storage, or whether the two phases would combine to reach that level.

The storage facility could serve other prospective customers in addition to PTTGC, said David Hooker, president of Mountaineer.

Mountaineer is a subsidiary of Energy Storage Ventures LLC.

The storage deal brings PPTGC one step closer to making a final investment decision (FID) on the project, said CEO Toasaporn Boonyapipat, CEO of PTTGC America.

PTTGC is looking for a new partner for the complex, after Daelim Chemical USA withdrew from the joint venture.

It could make an announcement about the complex by the end of this year or in early 2021.

The proposed project would include a 1.5m tonne/year cracker as well as PE plants.

Securing ethane storage has been a long-running challenge for petrochemical projects being developed in the northeastern US.

When any future cracker in the region shuts down for maintenance or unplanned outages, suppliers will continue to produce ethane, and that ethane will need someplace to go.

A US government study from 2018 identified possible underground storage facilities in the region.

Shell has already started construction on its petrochemical complex in Monaca, Pennsylvania.

That complex includes a 1.5m tonne/year ethane cracker and three polyethylene (PE) units, totalling 1.6m tonnes/year of capacity.

Thumbnail image shows a red polyethylene object. Photo by Al Greenwood