Friends (and NGL Storage) in Low-Lying Places, Part 2 - The Caliche Storage Project in Beaumont

A build-out of NGL fractionators, steam crackers and export terminals for ethane, LPG and ethylene is actively in progress along the Gulf. This growth is spurring the development of new storage capacity — not just at the Mont Belvieu NGL hub, but in other, nearby areas with access to fracs, crackers and export docks. Much of this new storage capacity is being developed by companies that fractionate mixed NGLs and sell so-called “purity products” to meet their internal needs. However, at least one project is being built by what you might call an “independent,” whose aim is to connect to multiple pipelines and provide storage services to customers, without taking title to products alongside their customers. Today, we continue our series on existing and planned NGL storage facilities along the Gulf Coast with a look at Caliche Development Partners’ new storage complex in Beaumont, TX.

As we said in Part 1 of our series, storage capacity and the ability to quickly move mixed NGLs (also known as y-grade) and purity products to where they need to be are critically important to those whose assets rely on a steady stream of these commodities for operation, production, transport, fractionation and export, as well as to those who crack NGL purity products to make ethylene and other products. For example, y-grade coming out of gas processing plants and being piped to a fractionation hub (or individual fractionator) needs to be put in storage until it is called upon. Then, mixed NGLs are pulled from storage and delivered to fractionation facilities. Once y-grade is fractionated, each of the resulting purity products needs to be put into its own distinct storage facility until demand — which can be lumpy — pulls it further down the supply stream. Also, steam crackers and export terminals receive and store purity products (ethane, propane, normal butane, isobutane and natural gasoline) to stage them for consumption (at crackers) or for loading onto ships. Steam crackers also need a place to store ethylene once it’s produced.

The most economic and practical way to transport and store y-grade, individual NGL purity products and ethylene is in their liquid state, which necessitates (for all but natural gasoline) 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. The injection and withdrawal of liquid hydrocarbons such as y-grade and purity products — as well as ethylene and propylene, the primary product of steam crackers — into and out of underground salt cavern storage wells is accomplished by a “brine displacement” method. Each cavern is always filled to its top with some brine (salt-saturated water) and some hydrocarbon product (y-grade, ethane etc.); because brine has a greater density, the pressurized liquid product “floats” on top of the brine. To inject liquid hydrocarbons into the well, brine is pumped out of the cavern into a brine pond on the surface, and the y-grade or purity product being injected flows in to fill the void being created at the top of the cavern as the brine is withdrawn. (The process for withdrawing liquid hydrocarbons is the exact opposite: brine is pumped into the salt cavern and y-grade or purity product is lifted out.)