Salt Cavern Gas Storage Facility Planned For Central Utah

Based on positive responses to a recent non-binding open season, Magnum Gas Storage, LLC, is working with respondents to firm up support for a project in central Utah to construct what the company says would be the first large-scale, high-deliverability, multi-cycle salt cavern natural gas storage facility in the western United States.

The company says it received responses from 26 bidders requesting more than four times the capacity offered in the non-binding open season that closed July 31, 2009. Plans are well under way to develop two caverns, each with working gas capacity of about 5.6 Bcf in Millard County, central Utah.

Robert Webster, managing principal, said, “We believe that the success of this open season demonstrates the industry’s growing recognition of the need for high-deliverability natural gas storage in the west. This facility will provide natural gas-fired electric power generators, gas distribution companies, producers and marketers throughout the region with cost effective, efficient and reliable access to natural gas supplies.”

He said the project offers direct and indirect interconnections with multiple pipelines originating out of the Rockies. Sponsors intend it to connect directly with a new lateral to the Kern River and Questar interstate pipelines at Goshen, UT, creating a header that will indirectly serve the Opal, WY area market hub pipeline interconnections through backhaul and displacement.

Webster has more than 25 years of experience in the Fortune 200, private and government sectors. Prior to co-founding Magnum, he has served on the Western Renewable Energy Zone Development Team through the Western Governor’s Association; as co-founder and director of a deregulated energy marketing/trading company; and as the fuel supply director for a large electric utility.

Webster recently spoke to P&GJ at length about the unique storage project.

P&GJ: Why is there a need for additional storage in the western United States?
Webster: The need for natural gas storage in the region is well-documented. According to the Energy Information Administration, gas storage capacity in the West is about 660 Bcf compared to 2,225 Bcf for the eastern states. Meanwhile, markets in the West are growing, both in the use of traditional energy supplies and in the development of renewable resources. High-deliverability storage will support the real-time operation of natural gas-fired generation in response to variable power demand and will provide new options for both electric and gas producers to lower risk and optimize existing resources.

P&GJ: What are some of the unique characteristics of this project as compared to other salt cavern storage projects?
Webster: Clearly, the key distinction is our hub concept. This project is the first integrated energy storage facility that will serve western energy markets and is strategically located to become a crossroads of existing and developing electric, natural gas and other energy infrastructure in the West. It is also designed to support expansion and utilization of renewable energy technologies.