Sempra unit proposes large storage project near Gulf Coast LNG facilities

02 Feb 2021  spglobal.com

Highlights

Four salt dome storage caverns, 20 Bcf working gas storage

Plans connections to pipelines serving LNG

Targets 2022 certificate, 2024 in-service

New York — Sempra LNG's LA Storage has asked the Federal Energy Regulatory Commission for permission to build a new salt dome facility capable of providing about 20 Bcf of working natural gas storage capacity in near Hackberry, Louisiana, to meet needs of Gulf Coast LNG facilities and other regional demand.

US LNG feedgas demand is forecast to rise 4.25 Bcf/d from 2021 to 2026, with all the projects being built along the Gulf Coast, according to S&P Global Platts Analytics. The high-deliverability Hackberry facility would help send reliable supply to facilities in the area, easing pressure to build more large pipelines, especially in a more restrictive regulatory environment for pipeline projects.

Some 81% of storage capacity in the Lower-48 states is in depleted fields, which have to be completely emptied before they can be refilled, according to Platts Analytics. As a result, they are generally useful when demand follows a binary seasonal pattern. Salt dome facilities have on average quadruple the maximum daily withdrawal rate and can be cycled more than once per season, providing significantly more optionality.

Target dates

The abbreviated application for the Hackberry Storage Project (CP21-44), posted Jan. 31 on FERC's website, requests a certificate of convenience and necessity from FERC no later than Jan. 31, 2022, with plans to begin service about first-quarter 2024.

"Once placed into service, the project will include four salt dome storage caverns, interconnecting pipelines, compression, and other facilities ... capable of providing high-deliverability natural gas storage capacity in the Gulf Coast to serve the needs of LNG facilities, electric generation facilities, industrial customers, utilities and other customers in the region," LA Storage said in its application. The project would be within 15 miles of pipelines serving Sabine Pass LNG, Cameron LNG, Golden Pass LNG, Port Arthur LNG, and Calcasieu Pass LNG, the application said.

The project would entail the conversion of three existing salt dome caverns, currently filled with brine, to gas storage and the development of one new salt dome cavern. The total capacity would include 20.03 Bcf of working gas and 5.47 Bcf of base gas. It would inject or withdraw gas at a maximum rate of 1.5 Bcf/d.

Project facilities also include a 4.9 mile, 42-inch-diameter, bidirectional lateral connecting the facility to an existing pipeline operated by Cameron Interstate Pipeline. This CIP Lateral would be collocated with other project pipelines. It also includes the proposed 11-mile, 42-inch-diameter Hackberry Pipeline, which would connect to the planned Port Arthur Louisiana Connector. Also envisioned is a 6.2 mile, 16-inch-diameter brine disposal pipeline.

"To reduce environmental impacts, the Hackberry Pipeline, the CIP Lateral, and the brine disposal pipeline then will be collocated for 4.7 miles from the gas storage facility. The Hackberry Pipeline and the CIP Lateral will be collocated for another 0.2 miles to the interconnection with CIP," the application said.

Project need

In pitching the need for the project, LA Storage pointed to expected growth in LNG projects and the unique production profiles of liquefaction facilities, citing the potential for significant imbalances during their planned and unplanned outages.

In addition, it said, "high-deliverability natural gas storage is often the most economic means of supporting deliveries to highly variable loads such as electric generation."

A September 2020 non-binding open season resulted in responses indicating an interest in firm storage service exceeding the proposed 20.03 Bcf of working gas, according to LA Storage.

The company is currently in the process of negotiating the execution of precedent agreements for substantially all the firm storage service with those potential customers, it said, expecting to file agreements at FERC "upon execution in the near future."