DOE Finds NGL Storage “Necessary”

Clarington, OH: The U.S. Department of Energy today released a Natural Gas Liquids Primer, with a focus on the Appalachian region, and cites Mountaineer NGL Storage as part of the primer.

The federal agency’s report addressed the growing trend of burgeoning natural gas liquids production in the Appalachian Basin combined with the alarming trend of net exports of ethane (page 10) and propane (page 13). DOE finds that “storage of NGL is necessary since produced volumes typically exceed the pipeline takeaway capacity and processing capacity.”

Mountaineer NGL Storage has invested approximately $20 million to date into its Appalachian region NGL Storage Project to secure up to 3.25 million barrels of storage capacity that’s scalable to more than 10 million barrels. The company plans to spend $150 million over the next three to five years and, based on market demand, that investment could top $500 million in total private capital investment.

“We’re pleased to see that the federal government has identified the need for NGL storage in the region and specifically sites Mountaineer NGL Storage as part of this Natural Gas Liquids Primer. We commend the DOE for providing this resource to help educate the public on the importance of keeping NGLs local to the region and believe our project is vital to help foster additional investments across the NGL supply chain, “said David Hooker, managing director of Mountaineer NGL Storage. “As this report clearly identifies, net exporting of NGLs is a certainty if we do not create storage solutions. Our company is the first to take real proactive steps to address underground storage in the Appalachian Basin.”

Last year the company announced a successful open season which resulted in requests for more than three times the amount of initial planned capacity. Recent reports by the American Chemistry Council and West Virginia University have all confirmed the need for NGL storage and the importance of keeping the natural resources local. The project will help ensure that NGLs remain in the region to be used locally by downstream energy consumers, such as petrochemical manufacturing.

The regional effort to support storage solutions has been largely supported by bipartisan elected officials in Ohio and West Virginia, as well as regional economic development groups and academics.

U.S. Senator Shelley Moore Capito (R-WV): “I’m pleased the Department of Energy has released its study detailing the benefits of an ethane storage hub, an effort I have long supported. Expanding energy infrastructure in West Virginia and central Appalachia will help grow and diversify the economy, create jobs and improve national security.”

U.S. Congressman Bill Johnson (OH-6): “The Appalachian region has the potential to become a major player in the petrochemical and plastic resin-producing industries, one that I believe could rival that of America’s Gulf Coast. With one ethane cracker construction underway in our region and the potential for another just around the corner, new requirements are emerging for ethane storage and pipeline infrastructure projects. These are positive opportunities creating developments for the hardworking people of Eastern and Southeastern Ohio, and I will continue to ensure Congress does not limit this new and growing economic potential, but instead helps to grow it.”

U.S. Congressman David McKinley (WV-1): “This additional investment by Mountaineer NGL Storage 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. These projects are a top priority that will help America reclaim the mantle of leadership in energy production on the world stage.”

Mick Schumacher, Monroe County Commissioner: “This DOE study proves that what we are doing here in the local region is a national issue. Underground NGL storage and the Mountaineer NGL project in particular is critical to the future of shale development in our region. We need to utilize our natural resources locally and grow jobs in our local economies rather than exporting our natural resources with little benefit to our residents. Those dollars need to be recirculated throughout our area in the form of paychecks, revenue and taxes.”

Carl Davis, Monroe County Commissioner: As Monroe county commissioner, I feel that the completion of this project is essential to the future of the proposed PTT Global project as well as the Marcellus and Utica shale plays and future exploration and production of our natural resources. This and other projects will bring employment to the area as well as the expansion of our local and regional economy and tax base.

Mark Thomas, Belmont County Commission President: “This is very good news for Belmont County and the entire upper Ohio Valley region. It is good to see that the federal government recognizes the economic importance of the tri-state area.  We appreciate so many people/entities working together to insure that the Appalachian Region is getting the attention it deserves. Thank you to Mountaineer NGL, for its continued commitment, and the county will continue to promote the region and help secure this local investment.”

Dr. Brian Anderson, Director of the WVU Energy Institute: “I am excited to see the progress that Mountaineer NGL is making towards constructing NGL storage in Appalachia.  The buildout 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.”

Dana Saucier, Senior Managing Director, JobsOhio: “Mountaineer NGL’s planned natural gas liquid storage facility would be yet another major strategic energy investment in this region. This strengthens the state’s long-term vision of growing our energy and chemical value chain, provides additional operation flexibility, and positions Ohio’s future in energy and chemical job growth.”

Ann Blankenship, Executive Director, WV Oil and Natural Gas Association: Mountaineer NGL’s investment announcement is 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.  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.”