Over the past two years, MPLX has been ramping up its midstream development activity in the Lone Star State, or more specifically in the “Permian-to-Gulf” market, where it’s been building or buying into gathering systems, gas processing plants, and crude and natural gas takeaway pipelines, among other things. Marathon Petroleum Corp.’s midstream-focused master limited partnership also has been in hot pursuit of a number of possible NGL-related projects, including MPLX’s proposed Belvieu Alternative NGL (BANGL) Pipeline and three big fractionation plants in the Sweeny, TX, area, and a planned LPG export terminal in Texas City, TX. As a group, these projects would require millions of barrels of underground salt-cavern storage capacity for y-grade and NGL purity products along the Texas coast, as well as multiple pipeline connections to move the stuff to where it needs to be. Today, we continue our series on Gulf Coast NGL storage with a look at the NGL side of the MLP’s Permian-to-Gulf strategy.
Texas’s Gulf Coast is in the midst of a major build-out of new fractionation plants (or “fracs”), steam crackers and LPG export facilities, all spurred by rising U.S. production of natural gas liquids. As we said in Part 1 of this series, this incremental NGL output and these new projects have been putting serious pressure on existing NGL pipeline and storage infrastructure, and prodding the development of new salt-cavern storage capacity for mixed NGLs and NGL purity products such as ethane, propane, normal butane, isobutane and natural gasoline. The most economical and practical way to transport and store these commodities is in their liquid state, which necessitates that the transport and storage occur under high pressure. And the most cost-effective way to provide large volumes of storage capacity at high pressure is to develop underground storage caverns within salt dome formations. There is currently about 260 MMbbl of NGL-related storage capacity in place at the NGL hub in Mont Belvieu, TX (red star in Figure 1). Elsewhere along the Texas coast, there is a total of about 100 MMbbl of NGL storage capacity, much of it tied to either fractionators or steam crackers. The companies holding the bulk of this “non-Mont Belvieu” storage capacity — at places like Stratton Ridge, Markham, Clemens Caverns and Hull (blue stars) — include Dow with about 40 MMbbl, Chevron Phillips Chemical with ~20 MMbbl, and Keyera, Phillips 66, Texas Brine, BP and others with ~10 MMbbl or less each for a combined 40 MMbbl.
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