Ready to Let Go - New Gulf Coast Gas Storage Coming Online, With Still More Capacity Being Planned

As a group, Texas, Louisiana, Mississippi and Alabama have more than 1.1 trillion cubic feet of natural gas storage capacity, most of it along — or within easy reach of — the Gulf Coast, with its long-and-growing list of LNG export terminals as well as gas-consuming industries and gas-fired power plants. That’s a good thing, but still more gas storage will be needed to help ensure there is sufficient gas in hand to meet the region’s rising — and increasingly volatile — requirements. In today’s RBN blog, we’ll continue our review of Gulf Coast storage projects with a look at plans by Trinity Gas Storage and Caliche Storage.

This is the third blog in our series on Gulf Coast gas storage. In Part 1, we explained that a combo-plate of factors — rising gas production, increasingly undulating demand for gas (tied in part to the ups and downs of wind and solar power), frequent extreme weather events, new LNG export capacity, and plans for lots of new gas-fired power generation — have been boosting the value of Gulf Coast storage or, more specifically, the merit of quickly injecting and withdrawing gas to respond to market swings. We emphasized a caveat, however, namely that while gas storage capacity is increasingly valued for its role in providing volume assurance and the opportunities created by high deliverability, that doesn’t necessarily mean storage values will be high enough to support the large-scale build-out of new facilities. Instead, the development of new storage capacity is likely to be very targeted — it will happen only where it has strong customer support and makes economic sense.

We’ve also been discussing the existing and planned Gulf Coast storage sites of several major players in that space. In Part 1, we looked at Williams, which recently expanded its storage assets in the region with the purchase of Hartree Partners and its 115 Bcf of storage in Louisiana and Mississippi, and at Enbridge, which has more than 100 Bcf of Gulf Coast salt-cavern storage and is planning a 6.5-Bcf expansion at its 35-Bcf Tres Palacios site. Then, in Part 2, we turned our attention to three other companies with existing Gulf Coast storage and plans for more: Kinder Morgan, with more than 155 Bcf along or near its Texas and Tejas intrastate pipeline systems (including a new 6-Bcf salt cavern at its Markham facility); EnLink Midstream, which owns three storage facilities in Louisiana and one in North Texas; and Enstor Gas, the largest privately held gas storage company in the U.S., with 110 Bcf of storage capacity across four states (Texas, Mississippi, Alabama and New Mexico) and plans to increase the capacity of one of its Mississippi sites by 34 Bcf).

Today, we’ll look at two privately held, storage-focused entities that each have their sights set on building more Gulf Coast capacity.