Two large hydrocarbon storage facilities are planned in U.S. Gulf Coast states.
Two Houston companies propose to construct a storage facility in Louisiana with more than 50 bcf of working gas capacity.
And units of ARCO and Plains Resources have signed a letter of intent expected to lead to construction of a 600,000 bbl crude oil storage facility on the Houston ship channel.
GAS STORAGE FACILITY
When it's complete late in 1993, the North Louisiana gas storage facility will tie into pipelines serving markets in the U.S. Midwest, Mid-Atlantic, and Northeast.
Natural Gas Clearinghouse (NGC) and Swift Energy Co. plan to form a joint venture to convert two horizons to storage in an undisclosed active gas field. Development will include installing compressors, flow lines, and meters and laying a 30 mile sales pipeline connecting the site to interstate pipelines.
Several gas injection wells will be drilled. Among the options NGC and Swift are considering are plans to drill as many as 10 horizontal wells into the storage zones to achieve maximum injection and withdrawal rates.
Installation of compression equipment could begin in fourth quarter 1992 and drilling of new injection wells in first quarter 1993, pending issuance of necessary permits, officials said.
NGC and Swift emphasized development plans are preliminary. Swift operates producing leases at the proposed storage site.
CRUDE STORAGE FACILITY
ARCO Pipe Line Co., Independence, Kan., and Plains Marketing & Transportation Inc. (PMT), Houston, plan to construct the crude storage facility on ARCO's property in Galena Park, Tex.
Plains will use the facility for commercial storage of crude. It will have access to multiple Gulf Coast receipt and delivery points and connect via ARCO's pipeline system to Plains' planned crude storage facility at Cushing, Okla. Plains claims it will be the only company to offer dedicated independent storage at Cushing and the Houston ship channel.
The Houston ship channel is a designated delivery point for the sour crude oil futures contract recently introduced by the New York Mercantile Exchange (Nymex), and Cushing is the delivery point for the Nymex light, sweet crude oil contract.
Space at the ship channel facility initially will be provided to customers at Plains' Cushing facility shipping on the ARCO pipeline system.
"The direct connection with ARCO is strategic since its pipeline is best positioned to handle the increased demand for foreign imports caused by declines in domestic production," said PMT Pres. Harry Pefanis.
Construction of the Houston facility is expected to begin upon completion of a definitive agreement and completion of engineering and design specifications. Groundbreaking at Cushing is scheduled for late March.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
