masthead

Henry Gas Storage LLC

Henry Gas Storage, LLC, (HGS) is a subsidiary of Ranger Gas Storage, LLC, a three-year-old partnership between industry veterans with more than 150 years of combined energy industry experience, including development, construction, operation and management of storage and energy facilities. HGS’s very own chief executive officer, Mike McCall, grew up in New Iberia, Louisiana, very near to the HGS project site.

The Project

Henry Gas Storage, LLC, (HGS) is proposing the development of an underground natural gas storage facility on Cote Blanche Island in St. Mary Parish, Louisiana, and the construction of a 12-mile natural gas pipeline to connect with nine interstate and four intrastate natural gas pipelines in the area.

Cote Blanche Island was chosen as the project site due to its proximity to the Intercoastal Waterway and Henry Hub, a pipeline system in Acadiana. In addition, Louisiana is a major consumer of natural gas and Louisiana workers have the skills and know-how to help build and operate this facility. In fact, for these reasons the Cote Blanche Island landowners reserved a portion of the island for natural gas storage in a 1960s lease agreement with a salt mine on the island.

The project will consist of the following major components:

  • 4 solution-mined caverns in the Cote Blanch salt dome for the purpose of storing natural gas;
  • up to 65,000 HP of compression to allow for the injection and removal of gas;
  • a solution mining plant to create the caverns;
  • a pipeline to dispose of the brine from the caverns; and
  • a 12 mile pipeline header system to receive gas from and re-deliver gas to various existing interstate and intrastate pipelines.

When fully developed, it is anticipated the project will consist of four caverns with 11.5 billion cubic feet (Bcf) of natural gas capacity each. Aggregate daily withdrawal and injections rates are designed for up to 2.6 Bcf and 1.0 Bcf, respectively.

Henry Gas Storage will construct 12 miles of new natural gas pipeline and interconnect with eight existing pipelines. Routing of the pipeline from the island will be to the northeast along existing highway, railroad, and utility rights-of-way. Brine generated from the solution mining operation will be released into the Gulf of Mexico south of Marsh Island via 25 miles of pipeline through Cote Blanche Bay.

HGS filed a request with the Federal Energy Regulatory Commission (FERC) on Aug. 27, 2008, to initiate a review of the project under the FERC Pre-Filing Process. The FERC approved the request on September 9, 2008 and assigned Docket No. PF08-28-000 to the project.

Currently, HGS is moving through the permitting and review process outlined by FERC and the Louisiana Departments of Environmental Quality and Natural Resources. Pending all necessary approvals and permitting requirements, construction will commence in 2011.

Henry Gas Storage Brochure
Henry Gas Storage Fact Sheet
Cote Blanche Island Project Site Map
Salt Mine/Storage Cavern Illustration

Regulatory Oversight

Henry Gas Storage will work closely with federal, state, and local authorities when siting and constructing storage facilities and the pipeline. HGS will also construct and operate the proposed facilities in a manner consistent with all applicable safety regulations and industry best practices.

The Federal Energy Regulatory Commission (FERC), an independent federal agency that regulates the interstate transmission of natural gas, will have primary responsibility for overseeing the permitting and construction of the project.

As part of its permitting review, the FERC will conduct an environmental review of the project in compliance with the National Environmental Policy Act. Although a formal permit application has not yet been filed, the FERC staff has begun the environmental review of the project under the pre-filing review process.

When the pre-filing review process is complete, HGS intends to file an application with the FERC for a certificate of public convenience and necessity under Section 7(c) of the Natural Gas Act, for authorization to construct, own, operate, and maintain the proposed project.

HGS is also in the process of applying for the Louisiana Department of Environmental Quality (DEQ) water discharge permit. DEQ has scheduled a hearing to discuss the permit application on Tuesday, March 9, 2010.

Economic Development

The HGS project represents an approximate $500 million investment over four years in St. Mary and Iberia Parishes, providing construction jobs for local workers, potential sales for local suppliers and about 20 permanent jobs at an annual salary of approximately $70,000, plus benefits. Overall impact to the Louisiana economy during the four-year construction period is estimated to be $670 million in new business sales, $220 million in household earnings and more than 1,600 temporary jobs.

Combining construction and operations, the facility will generate approximately $737 million in new business sales, $241 million in new household income and $35 million in new state taxes over a 10-year period, according to a recent economic impact study by economist Dr. Loren C. Scott, Professor Emeritus of Economics at Louisiana State University.

Community Interaction

HGS is committed to communicating with all interested parties throughout the duration of the project. In 2008, HGS held an open house in Franklin, Louisiana, to introduce its proposed gas storage facility to the local community. HGS CEO has also met with various elected officials, community members and other key stakeholders to discuss project specifics.

As part of HGS’s commitment to open communication with the community, HGS will:

  • develop and implement a communication and public outreach plan that identifies project contact and telephone numbers, as well as an office location and email address;
  • establish channels for two-way communication throughout the duration of the project. In addition to sharing information, our public participation plan will create dialogue with stakeholders from pre-filing through construction and in-service. This includes identification and dialogue with local landowners along the route as final pipeline corridors and right-of-way selections are made and as we obtain permission to conduct engineering, physical, biological and cultural surveys;
  • provide opportunities for on-going dialogue with state and local government representatives and community leaders to seek input and provide project updates; and
  • provide for adequate notice of all public open houses and other such public outreach meetings, including media notices, advertisements, and news releases.

Safety & Environment

HGS is committed to the highest standards of safety for our employees, industrial neighbors and the community. HGS will construct and operate the proposed facilities in a manner consistent with all applicable safety regulations and consistent with industry best practices.

Salt cavern natural gas storage facilities have been safely constructed and operated in many parts of the country for more than 50 years. Studies and analysis confirm that gas storage caverns and salt mines can safely co-exist. In fact, there are also several examples where gas storage caverns have coexisted for decades without incident on the same salt structure as salt mines.

North American Salt Company (NASC) mining history on site has not demonstrated any anomalies in the salt structure that would allow gas to migrate from gas storage caverns to the mine. HGS will conduct extensive testing of the salt structure, including borings and 3-D seismic, to confirm its integrity and ensure that no pathways exist that would allow gas to migrate from gas storage caverns to the mine. HGS will also use continuous computer monitoring to make certain there are no leaks. In addition, HGS is committed to the monitoring and maintenance of its pipeline to prevent incidents from occurring.

HGS storage caverns will be located at least one-half mile from the nearest mining activity. The top of HGS storage caverns will be located 3,300 feet below the surface, far below the salt mine, which is at a depth of approximately 1,500 feet.

The science and engineering of spacing between salt caverns is well known and incorporated in the FERC and Louisiana permitting processes.

Concerns & Answers

Following are a list of concerns and our responses regarding the siting of this project on Cote Blanche Island.

CONCERN: Is it unsafe for a natural gas storage cavern and salt mining operation to co-exist in the same salt dome structure?

ANSWER: HGS believes that gas storage caverns and salt mines can safely co-exist. The science and engineering of spacing between salt caverns is well known and HGS will construct and operate the proposed facilities in a manner consistent with all applicable safety regulations and best industry practices. There are several examples where gas storage caverns have coexisted for decades without incident on the same salt structure as salt mines and HGS is committed to continuing the success of this practice.

CONCERN: Is there any chance that gas from the storage cavern will migrate over to the salt mine?

ANSWER: Salt mining history on site has not demonstrated any features in the salt structure that would allow gas to migrate from gas storage caverns to the mine. To make certain of this, HGS engaged the best engineering and geological firms to complete engineering and geological studies. The findings from these extensive studies have determined there are no pathways for gas migration and the caverns and the mine can co-exist safely.

CONCERN: The gas storage cavern is simply too close to the salt mining operation.

ANSWER: HGS storage caverns will be located at least one-half mile from the nearest mining activity and miles away from the nearest residence. The top of HGS storage caverns will be located at a depth of 3,300 feet, far below the salt mine, which is at a depth of approximately 1,500 feet. This horizontal and vertical spacing is more than adequate to guarantee the safety of the mining operation. In fact, it is a greater distance than practiced in other similar situations.

CONCERN: Brine disposal from the storage caverns is going to damage sensitive marine life in the Gulf.

ANSWER: Years of actual monitoring of brine discharge related to the existing Louisiana Offshore Oil Port have confirmed minimal impacts to offshore marine life. HGS will use sophisticated sonar and other technical surveys to identify and avoid oyster beds. The project’s storage site and pipeline route have been selected to minimize the crossing of wetlands, stress to crops and disturbance to nearby residences and public facilities.

CONCERN: The state of Louisiana already has natural gas storage capacity, why do we need more?

ANSWER: With an investment of $500 million over four years, the project will have a significant positive economic impact in St. Mary and Iberia Parishes and south Louisiana. This means construction jobs for local, skilled workers and potential sales for local vendors and suppliers. Increasing natural gas storage capacity is an objective of the Louisiana Department of Economic Development, the Louisiana Association of Business and Industry and the Louisiana Oil and Gas Association. The need for energy projects is ultimately decided by their appeal to the market, and this project has had a positive reception from the natural gas marketplace.