Jan 5, 2018 3 min read

SOUTH CHARLESTON, W.Va. – A group formed to deliver an ethane storage hub seen as key to furthering regional economic development from liquid natural gas being produced from shale in the Appalachian Basin has been invited to apply for funding by the U.S. Department of Energy.

Appalachia Development Group LLC said in a press release Wednesday it was invited to submit a Part II Application for a $1.9 billion loan guarantee under DOE’s Title XVII Loan Guarantee Program. If approved, it would support the development of infrastructure for the Appalachia Storage & Trading Hub.

ADG acknowledged the invitation to apply for funding represents the first of several steps in the process to secure a conditional commitment and final loan agreement.

The Appalachia Storage & Trading Hub is a proposed underground storage facility for highly valuable natural gas liquids and intermediates. It is a built-for-purpose facility that enables tremendous benefits down range for both business and society.

ADG was formed as a collaborative platform to deliver the ASTH, considered to be industry’s catalyst for the industrial spread associated with the prolific shale gas developments in the Marcellus, Utica and Rodgersville Shales.

According to the American Chemistry Council, the development of the ASTH would serve as a catalyst for the creation of an estimated $36 billion in follow-on petrochemical investments and more than 100,000 new long-term jobs in West Virginia, Pennsylvania, Ohio and Kentucky. Proponents of the project, which has been studied for several years at West Virginia University, say it will increase the probability of American energy dominance by releasing the potential of the Marcellus, Utica and Rogersville Shale methane deposits for both domestic consumption and international consumption by America’s allies.

ADG submitted its Part I application in September, and worked with DOE’s loan program office over the last few months. It will work closely with the DOE on Part II of the application process while simultaneously working to secure a $1.4 billion equity position.

“We are pleased to have achieved this major milestone, but we are far from satisfied in our pursuit of a vibrant and growing Appalachia based in sound business principles,” said Steve Hedrick, CEO, ADG and President & CEO of Mid-Atlantic Technology, Research & Innovation Center. “We are grateful for the collaboration with the states in Appalachia, and industry, legal and financial partners.” “There is much work to be done to drive this forward, and our team is strong, prepared and highly motivated to move forward.

“I congratulate Appalachia Development Group on advancing to the second phase of consideration for the Department of Energy’s Title XVII Loan Program,” said Senator Shelley Moore Capito (R-WV). “This is a clear indication of the strength of their application, and it demonstrates the department’s interest in the transformative job creation and economic growth potential of developing an Appalachian market for natural gas liquids. This is another step in the right direction, and I will continue working to help make this game-changing idea a reality.”