Warren R. True
Pipeline/Gas Processing
Editor
Oil & Gas Journal for the first time has compiled a county by county list of underground natural-gas storage operating in the U.S. on Sept. 1.
Nearly 3.1 tcf of working gas in storage is currently operated. As will be discussed, several projects to add capacity are under way or planned before 2000.
Fig. 1 breaks out this working gas capacity by supply and consuming regions of the U.S. as defined by the American Gas Association. Fig. 2 shows working gas capacities by state.
To collect the data, OGJ contacted every company reported by the American Gas Association, U.S. Federal Energy Regulatory Commission, or the U.S. Department of Energy to have operated storage in the past 2 years.
The results were combined with other published information to form Table 1 which provides base, working, and total gas capacities for storage fields, types of reservoirs used, and daily design injection and withdrawal rates.
DEREGULATION
This compilation has been prompted by the importance underground natural gas storage has come to play in ensuring gas supply availability. In fact, storage played a key role during the 1993 94 winter when colder than-normal weather hit parts of the U.S. Northeast, South, and Southeast.
Storage's emerging importance in natural gas transmission in recent years is almost entirely due to the ongoing deregulation of the transmission industry since 1984. That effort culminated in FERC Order 636 (OGJ, Apr. 13, 1992, p. 32) which took effect Nov. 1, 1993.
Deregulation in general and Order 636 in particular have ended interstate pipeline companies' role as merchants of natural gas, forced them to segregate ("unbundle") their interstate gas-transportation services and fees, and opened interstate transmission capacity to access by qualified shippers on firm or interruptible bases.
Interstate pipelines' gas storage capacities were among the transportation services affected.
Order 636 allows interstate pipelines to retain only enough storage and transportation capacity to operate their interstate transmission systems and to provide no notice services. The obligation to ensure reliability of supplies has fallen mainly on end users and indirectly on suppliers and shippers serving them (OGJ, Oct. 25, 1993 p. 21).
Storage of natural gas, then, both at the producing and at the consuming ends of the transmission system, has emerged as shippers' primary means of maintaining flexibility to meet fluctuations in supply and demand.
So important has information about storage become to natural gas producers, marketers, and consumers that the AGA inaugurated last spring a weekly report on the nation's underground storage inventories.
The service grew out of its latest field by field survey (1993) and compares weekly volumes of working gas against its assessment of total working gas capacity available.
OGJ includes AGA's most recent numbers in its weekly "Statistics" section.
WHAT'S AHEAD
Before Order 636, most underground natural gas storage lay in market areas to serve seasonal and peak demand. With interstate pipelines managing supplies for most areas, producers had little incentive for storage.
Since Order 636, however, the increased importance of storage capacity has spawned numerous projects by interstate pipelines and independent gas marketers.
Construction on the Avoca storage project in Steuben County, N.Y., is likely to start second quarter 1995 with the first 2 bcf of working gas capacity available for the 1997 98 heating season. The salt cavern project is one of two highly publicized projects by J. Makowski County, Boston, eventually to install a total of 10 bcf of storage.
The other project, Cayuta in Schuyler County, mirrors Avoca in targeted initial and ultimate capacities and timetable. Permits for Cayuta will be filed in November, says Makowski.
Each will begin with 100 MMcfd design injection rate, growing to 250 MMcfd. And each will work on 10/20 day, injection/withdrawal cycles.
Also in the Northeast, National Fuel Gas Supply Corp., Buffalo, has applied to FERC to develop storage by converting the depleted Callen Run field in Jefferson County, Pa. The company says the field will have total capacity of 23.5 bcf with working capacity of 12.1 bcf.
National Fuel also says it is improving nearby Allegany State Park to increase base gas capacity to 10.5 bcf and working gas of 7 bcf.
The combined projects, known as the "Laurel fields storage," will have combined maximum rates of injection of 171 MMcfd and withdrawal of 207 MMcfd.
Out west, Colorado Interstate Gas Co. says that limited storage will be available at its Young field after Mar. 1, 1995.
The company is developing 5.3 bcf of working gas there atop 4.7 bcf of base gas. Injection rates will reach 94 MMcfd; withdrawal rates 199 MMcfd.
And in California, Alenco Resources Inc., a unit of Alberta Energy Co. Ltd., Calgary, would operate a proposed storage and market center being evaluated by AEC and McFarland Energy Inc., Santa Fe Springs, Calif., for the Ten Section field near Bakersfield, Kern County.
The field would provide an estimated 1 bcfd of deliverability and provide alternative storage in competition with the two major California utilities (Apr. 11, p. 44).
SLAT CAVERNS
Along with a general surge in storage projects to take advantage of opportunities in Order 636 has come a greater use of salt caverns for gas storage as compared to depleted reservoirs.
Table 1 makes clear that depleted reservoirs remain the dominant structures used for storage. With their generally large capacities and slow injection and delivery rates, reservoirs often provide baseload supply during heating seasons.
The need to cycle a storage facility's supplies quickly, however, as well as other features has led to the emergence of salt cavern storage in many recent projects.
(This trend is evident in the other two articles in this special report; both focus on salt cavern storage.)
Salt cavern storage allows rapid cycling of working gas volumes and can sustain delivery for several days. And typically, a cavern can be converted from injection to withdrawal back to injection in a few hours.
In its 1988 review of natural gas storage, AGA found only 12 used salt caverns among a total of 249 projects developed in North America.
But in a review late last year of projects under way or proposed since Order 636, Pace Consultants Inc., Houston, found that 13 of 27 projects involved salt caverns. Since 1986, Pace found 77 bcf of 252 bcf of working gas capacity to have been in salt caverns.
Of projects announced in late 1993, more than half of the planned gas storage capacity was to be in salt caverns.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.