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NYSE: GAS $41.30 -0.25
Feb 6 2012 3:49PM ET
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FAQ
What is Golden Triangle Storage?
Golden Triangle Storage, Inc. (GTS), a wholly owned subsidiary of AGL Resources Inc., is applying to the Federal Energy Regulatory Commission (FERC) under Section 7(c) of the Natural Gas Act for a new Certificate of Public Convenience and Necessity to increase the storage capacity of its existing natural gas storage facilities located in the Spindletop Oil Field near the southern edge of Beaumont, Jefferson County, Texas. GTS is a natural gas company within the meaning of the Natural Gas Act and provides natural gas storage and hub services for others in interstate commerce subject to the jurisdiction of FERC. GTS has currently built two caverns hollowed out of the Spindletop Salt Dome, approximately a half-mile to a mile below ground. GTS' existing facilities also include a central compression station and a dual pipeline nine-mile header that links the storage facility with nearby transmission pipelines to access natural gas supplies and markets. GTS is proposing to expand its facilities by building two additional storage caverns within its central storage site.
Why does the region need a storage facility?
The abrupt escalation of energy prices after Hurricanes Katrina and Rita and instability in the Middle East and other producing regions emphasize the importance of reliable supplies of natural gas and other energy sources in the United States. Natural gas storage provides several benefits by
- balances changes in the consumption of natural gas;
- stabilizes prices; and
- provides a buffer against disruptions.
With the Beaumont region’s central and growing role as a national energy hub, more storage is needed. It makes sense for both the area economy and energy customers to build the storage here in Jefferson County. The site is close to both energy supplies and to nearby pipelines that serve local, regional and national customers.
How is the storage facility built?
In a process called solution mining, we use water to dissolve salt in the Spindletop dome, hollowing out caverns about a half-mile to a mile below the surface. The process is similar to running water onto a block of ice to create a hollowed-out area. Once the cavern is formed, geologic conditions keep the walls rock hard and virtually impervious.
What are the safety procedures?
Salt domes have been used in the United States for about 60 years to store natural gas and are the safest means of doing so, according to the U.S. Department of Energy. The caverns will be created about a half-mile to a mile deep underground, where they are protected by thousands of feet of rock, soil and other sediments. A geologic condition at those depths makes the salt formation rock hard, creating an impermeable barrier to contain the natural gas.
How will the project improve the area economy?
The Golden Triangle Storage facility has provided jobs, creating approximately 136 during construction and adding 11 permanent positions. In addition, property taxes, franchise taxes, sales taxes, utility payments, purchases of goods and services, and payroll all will contribute to the local economy. An economic impact study from Lamar University predicted the project would provide a direct monetary benefit to the region of more than $15 million during construction and another $5.4 million annually once the facility is operational. To date, Golden Triangle Storage has spent more than $300 million in the Beaumont area.
Golden Triangle Storage also will strengthen the region’s position as a national energy center. The facility will
- Increase local storage capacity significantly, serving both domestic natural gas production and natural gas imports from area liquefied natural gas (LNG) terminals
- Provide greater flexibility in natural gas supply, increasing the amount of natural gas available to meet peak demand and helping stabilize prices
- Improve energy security when natural gas supplies are disrupted by hurricanes or other events
- Serve as a key component of the region’s integrated energy infrastructure that includes oil and gas production; LNG import facilities; gas processing plants, refineries and petrochemical plants; and pipelines that deliver the products to customers
Will the project store LNG?
No, the facility will only store natural gas, not its liquefied form.
In order to transport natural gas by ship, the gas is cooled to a very low temperature until it becomes a liquid, at approximately -260 degrees Fahrenheit. Once the LNG tanker reaches port, the liquefied natural gas is offloaded and “regasified,” or warmed up to normal temperatures. Back in its gaseous state, the fuel is transported by pipeline to market – or stored in facilities like Golden Triangle Storage until needed.
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