December 7, 2009
Keyera embarked on a four cavern expansion of our underground storage facility in Fort Saskatchewan in 2007. When all four caverns are complete, our storage capacity for propane, butane and condensate will increase by 32%, to about 12 million barrels. Should demand dictate, we have room to create six more caverns, which would increase our capacity by another 4.5 million barrels. Service of our new storage cavern at Fort Saskatchewan should begin in 2010.
Salt Cavern Storage
Demand for propane is often higher during the winter, partly because it is a heating fuel in residential and commercial settings. Stored NGLs play a vital role in ensuring that any excess supply delivered during the summer months is available to meet the increased demand during the winter.
Underground salt formations are well suited to NGL storage in that salt caverns, once formed, are essentially impermeable; meaning no fluid or gas can escape through the surrounding rock salt.
To create a new storage cavern, like the one currently underway at our Fort Saskatchewan facility, we bring a drilling rig on site to drill a hole to a depth of approximately two kilometers into the Lotsburg salt formation. This hole is lined with pipe, called casing. (for a visual illustration of the process, check out Midstream 101) Keyera completed this step for its new cavern in 2008.
Two tubing strings are inserted into the casing (one inside the other), and a wellhead unit is attached to the casing at the surface. This creates three channels, allowing fluids to flow separately between the surface and the cavern.
With the tubing in place, water is pumped down the larger tubing string and into the salt formation. The water dissolves the salt, becoming brine. The brine is returned to the surface through the inner tubing string. NGLs, often propane, are injected into the outer casing and pumped down to the top of the salt cavity to act as a buffer to protect the integrity of the cavern ceiling and the piping located there. The process of flushing the new storage cavern in Fort Saskatchewan began in 2009 and should be complete in 2010.
Over 18 to 24 months, water pumped into the formation gradually enlarges the cavern, creating a pear shaped profile. When the cavern has reached its optimal size, (usually between 750,000 and one million barrels of capacity), saturated brine is used instead of water to ensure the cavern doesn't grow any larger. Upon removal of the inner tubing string, the cavern is ready to be put into service. Service of our new storage cavern in Fort Saskatchewan should begin in 2010.
Once operational, as NGLs are pumped into the cavern for storage, brine is displaced to the surface and deposited in large brine ponds. To remove NGLs from storage for delivery to customers, brine from the surface ponds is allowed back into the cavern, displacing NGLs to the surface.
Because NGLs, such as propane, butane and ethane are lighter than brine, they will float on top of the brine within the caverns. To inject products into the cavern, the products are pumped down the outer annulus of the pipe casings and the brine is displaced up and out of the inner brine pipe. The reverse operation brings product out of the cavern by pumping in the brine and retrieving the product.
Deliverability from salt caverns is typically much higher than for either aquifers or depleted reservoir storage facilities. Therefore products stored in a salt cavern may be more readily (and quickly) withdrawn, and caverns may be replenished with product more quickly than in either of the other types of storage facilities.