It’s relatively common along the U.S. Gulf Coast to use underground salt domes to store crude oil, natural gas, mixed NGLs and so-called NGL “purity products” like ethane and propane. There are also a handful of salt cavern storage facilities in Kansas, Michigan, New York and Virginia. But in the Rockies and the West Coast states they’re rare as hen’s teeth, one of the few examples being Sawtooth Caverns, a one-of-a-kind facility in Utah that not only stores propane and butanes but also gasoline and diesel. In today’s RBN blog, we discuss Sawtooth Caverns and its increasing role in the sprawling region’s NGL and refined products markets.
We’ve been interested in salt dome storage for many years. In one of our first blogs (Smoky and the Salt Caverns back in 2012), we wrote about the legendary Gaines H. “Smokey” Billue — a character if there ever was one, weighing in at over 300 pounds, a ponytail under his sombrero, a bright-colored shirt, a Colt .45 in his belt and a Bowie knife tied to his red-and-white cowboy boots. Back in the early 1950s, Smokey came up with the idea of creating domes within massive salt formations and using them to store NGLs and other hydrocarbons. Over the years, we’ve written many blogs about salt cavern storage, especially regarding NGL storage at the Mont Belvieu, TX, fractionation and storage hub; crude oil at the Strategic Petroleum Reserve (SPR) sites in Texas and Louisiana; and the increasing number of natural gas caverns along the Gulf Coast.
But as we hinted at in the introduction to today’s blog, Sawtooth Caverns — like Smokey Billue — is in a category of its own, not only because it’s the largest of the very few salt dome storage facilities in either PADD 4 (Rockies) or PADD 5 (West Coast) but also because it’s been branching out from NGL storage to include gasoline and diesel — something that's relatively common in Europe but a rare sight indeed in North America. By doing so, Sawtooth Caverns is helping to smooth out the refined products markets in both PADDs.
So, what is Sawtooth Caverns, what does it have and what does it do? Sawtooth Caverns LLC, the facility’s owner and operator, is a 50-50 joint venture (JV) of commodities trading giant Trafigura and Haddington Ventures, a private equity investor in conventional and renewable energy projects. The Sawtooth Caverns storage facility in Delta, UT — about 130 miles south/southwest of Salt Lake City — was initially developed in the mid-2010s by Magnum Development, a former portfolio company of Haddington Ventures that is now a subsidiary of Chevron. (Chevron owns a salt dome storage facility for natural gas in Delta very near Sawtooth Caverns. More on that later.)
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