We’ve talked a lot here about NGL storage in Mont Belvieu and Conway. Those are the big underground storage caverns washed out of salt formations thousands of feet below the surface. But those are not the only places where NGLs are stored in underground salt caverns. Two important facilities, especially for West Coast NGL markets are located in the seemingly unlikely locations of Bumstead, AZ and Adamana, AZ. Today and in a later follow up we’ll look at why these facilities are in Arizona, how they got there, and the unique niche they fill in the NGL marketplace.
In our previous blogs on NGL storage, we looked at the process of washing these huge caverns in dome and bedded salt formations in Smoky and the Salt Caverns, and we reviewed the importance of NGL storage to the overall industry value chain in Can Mont Belvieu Handle the NGL Supply Surge? There are about 700 million barrels of storage used for NGLs, depending on who you talk to, with about 60% of that total spread across about 250 caverns in Texas. But believe it or not, Texas is not the only place in the NGL universe. We’ve also spent some time looking at that island of NGL markets on the West Coast in The Wild West of NGL Markets. In that series we explained how there are only a few miles of NGL pipes on the West Coast, and most everything moves by rail and truck. And all the storage is in steel bullets, spheres and tanks. But that’s not entirely true.
Because out in the Arizona desert there are these two old and fairly unknown underground salt facilities for storing NGLs - Bumstead Storage near Phoenix, AZ and Adamana Storage in Holbrook, AZ. They have been around for a long time. Interestingly they now find themselves located right between the West Coast NGL market and a lot of the new shale plays in Permian and the Rockies. Think about that for a minute. Together these two facilities provide about 6 million barrels of NGL (LPG) storage capacity. That may not sound like much in the context of Mont Belvieu, but it is huge in the West Coast market. Could it be that they are in a really good spot with what is going on in the new world of shale gas derived NGLs? Guess we’d better take a look.
Check out the map below. Holbrook is on BNSF, only about 500 short railroad miles away from the Permian Basin. Bumstead fortunately has connections with both BNSF and Union Pacific (UP), making it an ideal way station between the two rail systems.