Thursday, February 03, 2011

Natural gas shortages might be alleviated with underground salt caverns

An estimated 18,500 southern Arizonans are without natural gas to heat their homes and service may not be restored until next Tuesday, according to news reports. The problem appears to be huge demand for gas nationwide due to the massive storm affecting most of the country. Gas supplies are being spread thin, causing the pipeline pressures to drop, shutting down natural gas deliveries from Texas to Arizona.

Meanwhile, plans are under review to create huge caverns in salt deposits [right, basic configuration of salt cavern storage system. Credit PB Energy] below the Picacho basin in Pinal County north of Tucson, to store natural gas under pressure to use during times of peak demand. The Federal Energy Regulatory Commission (FERC) is evaluating a proposal from Houston-based Arizona Natural Gas Storage to create a system of up to 8 man-made caverns to store 20 billion cubic feet (BCF) of gas and connect to the El Paso Natural Gas and Transwestern Gas Transmission pipelines. If approved, the facility would come online in summer 2012. To put that in perspective, Arizona used a total of 364 BCF of gas in 2009, with residential use amounting to 34 BCF.

Update from the US DOE Energy Information Agency -

  • Several pipelines posted notices in reaction to the increased demand due to cold weather. According to BENTEK, demand in the Rockies reached record levels on Tuesday and Wednesday due to a cold weather pattern that was moving east. On February 2, Westcoast Energy, Inc. issued a low-linepack Operational Flow Order due to system drafting. Similarly, Kinder Morgan Interstate Group pipeline issued a notice that, effective February 2 until further notice, Kinder Morgan Interstate Group is at capacity for received quantities from Cheyenne Plains. Based on the current level of nominations, interruptible and secondary quantities are at risk for not being scheduled. Colorado Interstate declared a system-wide strained operating condition due to an inability to absorb imbalances as storage withdrawals are at maximum capacity.

  • The weather also affected natural gas flows on Kinder Morgan’s Rockies Express Pipeline. Although the capacity of the Rockies Express Pipeline leaving Wyoming has been nearly fully utilized, segment flows to the pipeline’s terminus in Clarington, Ohio, were at their lowest levels on February 2 since the opening of the pipeline, according to BENTEK Energy. Flows to Clarington have averaged 1 Bcf per day since the service began. On February 2, the amount of natural gas reaching Clarington was half that level. This would indicate that natural gas that normally ends up in Clarington was delivered upstream.

  • El Paso Natural Gas Pipeline issued an Emergency Critical Operating Condition Declaration for February 2 until further notice. According to the notice, due to “current supply shortfalls caused by extreme cold temperatures and power outages in the production areas connected to the system and current demand on the delivery side of the system,” El Paso did not expect conditions to improve in the next 24 hours. El Paso placed underperformance caps in nomination Cycle 4 on February 2. Their Washington Ranch natural storage facility was on maximum withdrawal.

  • Effective February 3, Transwestern Pipeline Company issued a critical notice that an Alert Day was in effect systemwide due to low linepack. If actual volumes vary from scheduled volumes in the direction of the low line pack position, a penalty may be imposed on operators.

  • Storage operators have also posted notices in reaction to higher levels of demand. Both the Moss Bluff storage facility in Liberty County, Texas, and Egan Hub in Acadia Parish, Louisiana, scheduled and sealed all withdrawal activity for their facilities for February 2—no additional increases in withdrawals were accepted. Both facilities anticipate continued high withdrawal rates for February 3 through February 5 and noted that restrictions to interruptible services may be required beginning on February 3.

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