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NYSE: ATG $33.58 +0.59
Jul 8 2008 3:50PM ET
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Project Information |
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FAQ
What is Golden Triangle Storage?
The project will store natural gas in two caverns hollowed out of the Spindletop salt dome, approximately a half-mile to a mile below ground. It also will include an approximately nine-mile pipeline that will link the storage facility with nearby transmission pipelines to access natural gas supplies and deliver stored gas to market. AGL Resources is completing feasibility studies on the project, and if it moves forward, Golden Triangle Storage would increase Jefferson County’s natural gas storage capacity by 80 percent and enhance its position as a key national energy center.
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
- balancing changes in market demand,
- stabilizing prices and
- providing a buffer against supply disruptions, such as hurricanes.
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 will 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 studies is AGL Resources undertaking?
AGL Resources and its consultants have completed studies of the geology of the salt dome, two phases of an environmental assessment and a subsidence evaluation to determine the impact of past sulfur mining operations in the area. Based on these studies, experts have created an optimal cavern design for the operating conditions. Efforts are well underway to engineer the site surface facilities, power supply and the interconnecting pipeline. The company has conducted engineering, environmental and cultural resource studies along the proposed nine-mile natural gas pipeline route and has begun meeting with landowners to negotiate the necessary easements for the right-of-way.
How will you make the facility safe?
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. Geologic conditions at those depths makes the salt formation rock hard, creating an impermeable barrier to contain the natural gas.
At AGL Resources, we are committed to making Golden Triangle Storage a safe neighbor. We will design, build and operate the facility following all the latest safety guidelines and intend to meet or exceed all regulatory requirements. Among the safety features we build in are
- Emergency shutdown devices at plant and wellhead, with both automatic and manual operation
- Fire detection and extinguishment systems for surface facilities
- Visible and audible alarm systems
- Wellhead barrier to prevent mechanical damage and impact
- Monitoring of storage operations 24/7/365 by trained, qualified personnel
- Emergency response plan – shared and coordinated with local authorities
- Employee training on safety and operations
- Testing, reliability and maintenance programs
How will the project improve the area economy?
The Golden Triangle Storage facility will provide jobs, creating up to 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 predicts the project will provide a direct monetary benefit to the region of more than $15 million during construction and another $5.4 million in annually once the facility is operational.
As importantly, Golden Triangle Storage also will strengthen the region’s position as a national energy center. The facility will
- Increase local storage capacity by 80 percent, serving both domestic natural gas production and natural gas imports from the three planned liquefied natural gas (LNG) terminals in the area
- 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
- Enhance the functionality of much of area’s existing infrastructure and the $12 billion in investment slated over the next five years.
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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