Building an NGL storage hub energizes speakers at Southpointe

Above the subterranean pot of gold known as Marcellus Shale and Utica Shale, professionals in the energy and chemical fields touted the importance of hydrocarbon storage.
“I think the best times are ahead of us, which is great,” Joe Barone, president of Shale Directories, said Thursday morning as he kicked off the second annual Appalachian Storage Hub Conference at the Hilton Garden Inn Pittsburgh/Southpointe.
Barone, whose ShaleDirectories.com connects the oil and gas industry with local businesses, organized the event along with Tom Gellrich, chief executive officer of TopLine Analytics, which consults with the energy industry on downstream impacts of shale gas.
Panelists and individual speakers presented during the six-hour event focusing on a natural gas liquids storage hub, a $10 billion infrastructure project that would provide a midstream hydrocarbon storage system. Raw-material hydrocarbons such as ethane and butane would be stored there along with ethylene, a manufactured chemical intermediate.
These hubs also are essentially transmission points, with pipelines from source locations to manufacturing locations.
The ability to store resources that are bountiful in the shale formations running beneath Washington and Greene counties, much of Pennsylvania and parts of West Virginia and Ohio is a key element for the oil and gas industry. That is especially true now that Shell is building an ethane cracker plant in Beaver County. A successful storage hub could attract more crackers to the Ohio Valley part of the Appalachian Basin.
Storage hubs exist elsewhere across the globe, but not near here. Some have been built above ground, but are more expensive and require more space than those built below.
Subterranean hubs, depending on the local geology, are built in salt domes, natural gas caverns or other nonporous formations.
Kristin Carter can describe all of them. She is an assistant state geologist who manages the Economic Geology Division of the Pennsylvania Department of Conservation and Natural Resources. And she is a Washington native, a proud alum of old Immaculate Conception High.
Building a hub in Washington or Greene, Carter said, is a possibility. She said salt domes exist in these counties, but Greenbrier limestone is more prevalent in this area. The process, however, could take years.
One speaker, David Hooker, president of Mountaineer NGL Storage, said his company plans to build a storage hub in Monroe County, Ohio – across the Ohio River from West Virginia. He said $20 million has been spent in the permitting process for a hub in Clarington.
“If the hub develops,” Hooker said, “we hope to have 10 million barrels of storage. If it grows, we will see benefits (in Pennsylvania and West Virginia, as well).”
He cautioned, however, that “you don’t have a storage hub until you have the production to drive a storage hub.”
The United States already has reaped benefits from shale development. Gellrich, a chemical engineer, described a 1973 “energy shock” when energy prices tripled, then another in 1979 in which costs doubled again. Then the “shale shock” – as he described it – of 2008-2012 brought about a 300 percent decrease in prices.
The subject of an Appalachian storage hub arose earlier this week when state Sen. Camera Bartolotta, R-Carroll Township, introduced a resolution urging Congress to pass several bills related to the hub.
“Pennsylvania is one of the nation’s leading states in terms of natural gas production, manufacturing and the petrochemical industry,” she said in a prepared statement. “Building an ethane storage and distribution hub would help our state capitalize on its existing infrastructure and natural resources, giving us an opportunity to create more quality jobs and drive business growth throughout the region.”