Underground Storage Overview

Underground salt caverns have been used to store natural gas, compressed air, hydrogen, and liquid hydrocarbons (including crude oil) since the early 1940’s. Salt is nearly impermeable to the flow of gas or liquid hydrocarbons, making the risk of product leakage from salt caverns extremely low. Salt will flow from high to low pressure, at depths typical of hydrocarbon storage caverns, giving it the ability to self-seal under cavern operating pressures. When storing liquid hydrocarbons in volumes greater than 500 Mbbls. salt cavern storage facilities have lower construction costs than surface tankage or conventionally mined storage caverns. These factors taken together make salt caverns the best choice for large volume hydrocarbon storage. 

Salt caverns are carved out of underground salt domes by a process called "solution mining." Essentially, the process involves drilling a well into a salt formation, then injecting massive amounts of fresh water. As the water dissolves the salt, a cavern is formed. Cavern development takes place over a period of years during which tens of millions of gallons of water are injected to dissolve the salt in a controlled manner.

The Department of Energy’s Strategic Petroleum Reserve (“SPR”) and the Louisiana Offshore Oil Port (“LOOP”) currently use salt caverns as crude oil storage facilities.

Currently, Fairway Energy is focused on developing Phase 1A of the Fairway Crude Oil Storage Project  which consists of three cavern systems with approximately 7 million barrels of existing cavern capacity. Phase 1A is expected to be in service in April 2017 and will have pipeline connectivity to the major crude oil hubs in the Houston market area.

Phase 1B will add an additional 2.6 million barrels of capacity. In service date - to be determined.   

Phase 2 will consists of two additional cavern systems with approximately 9.0+ million barrels of existing cavern capacity. Phase 2 construction commencement date is to be determined.

CNBC

The most efficient way to store crude oil

 

Underground Storage Overview Pierce Junction Project