The Appalachian region in the US is rich in unconventional (shale) gas and byproducts – Yet the major downstream money is made elsewhere. A newly proposed storage hub shall change this…
Weston, West Virginia/USA – The proposed US 10 billion natural gas transmission and storage project finds more and more supporters within the industry: "The Appalachian Storage Hub is needed to take full advantage of chemical and plastic raw materials found in the Marcellus, Utica and Rogersville shales," explained Kevin DiGregorio, executive director of the economic development non-profit Chemical Alliance Zone, Inc. (CAZ.
The Appalachian basin has to of the most important shale reservoirs, namely the Marcellus and Utica. These two sources has been the driving forces of the US gas production since 2008 with reservoirs for decades to come, industry experts assume. Yet currently, most of this gas is shipped to the US Gulf coast, where a thriving downstream industry attracts projects in the billion dollar range.
Experts like Brian Anderson of West Virginia University’s Energy Institute speak of a “siphoning” effect for the region, should no regional gas infrastructure be established in the Appalachian basin.
“We’re really trying to work on everything on the downstream side,” Anderson stated.
Currently, several huge gas processing, purifying and cracker projects are underway along the Ohio river. Yet, what the regional industry needs is a local gas storage and distribution infrastructure, Anderson states.
Plans for a US$ 10 billion dollar project include underground storage facilities for ethane and other natural gas liquids as well as pipelines for raw gas and cracker products. "The proposed 'six-pack' pipeline system would transport methane, ethane, ethylene, propane, propylene and chlorine to manufacturing facilities throughout the region," states Kevin DiGregorio. Pipelines would connect the gas hub to several “key” facilities along the Ohio river like Shell’s proposed Monaca cracker or Marathon Petroleum’s Catlettsburg refinery. A connection to the petrochemical plants in the Kanawha Valley, West Virgina, is also likely.
During good production months, some 350,000 barrels per day of ethane are shipped to Texas and Louisiana, as the regional infrastructure can’t handle this amount of gas, industry experts say.
A strong Appalachian gas infrastructure could further profit from its proximity to densely populated cities in the eastern United States and Southern Canada as well as from lower feedstock prices due to the local gas production.