Pivotal Energy Builds Up Its Gas Storage Portfolio

By Jeff Share, Editor | April 2009 Vol. 236 No. 4
Buyer's Guide

Late last fall, Pivotal Energy Development began construction of Golden Triangle Storage, a 12-Bcf natural gas storage center that is located in and on top of the historic Spindletop salt dome near Beaumont in Southeast Texas.

With the drilling of the first cavern well completed, Pivotal is now in the midst of completing a second cavern well. The developers have also completed installation of water-handling facilities and leaching operations on cavern one have started. Through mid 2010, Golden Triangle will pump water into the first cavern well, dissolving the salt, and remove the resulting brine to create the approximately 1,500-foot tall, 300-foot diameter cavern. Brine is transported by pipeline to four disposal wells drilled nearby where it is injected into salt water-filled formations almost 8,000 feet below the surface, according to Pivotal.

Pivotal, a Houston business unit of AGL Resources that is headquartered in Atlanta, expects the first cavern to begin commercial operations the summer of 2010 with the second cavern coming online in 2012. The two caverns can each be expanded up to 8 Bcf of working gas. The storage center itself can expand to more than 36 Bcf by adding caverns as dictated by market conditions.

“Golden Triangle is uniquely positioned at the intersection of growing natural gas supplies and the infrastructure that deliver it to market,” explained Dana Grams, president of Pivotal Energy.

“The area will see increased supply inflows from shale gas and LNG imports as well as from conventional sources,” he continued. “Golden Triangle provides a convenient parking place for these supplies and connects to diverse markets through three intrastate and three interstate pipelines. As a high-deliverability facility, we will be able to inject up to 300 MMcf/d and deliver up to 600 MMcf/d.”

A nine-mile dual pipeline header system will connect storage to Florida Gas Transmission (downstream of station 6), Texas Eastern Transmission (WLA pool), Centana Pipeline, Energy Transfer’s Texoma line, Kinder Morgan Texas and ExxonMobil’s Golden Pass Pipeline. Future plans may include Enbridge’s Clarity line from the Barnett Shale in East Texas.

Pivotal was established in 2003 by former AGL CEO Paula Rosput in an effort to build up the holding company’s midstream natural gas portfolio. Today Pivotal also owns and operates Jefferson Island Storage & Hub in Louisiana and Pivotal Propane of Virginia. Jefferson Island was acquired from AEP in 2004 and includes two salt-dome storage caverns under Lake Peigneur that have been operating for over a decade. AGL is hoping to settle a lease dispute with the state of Louisiana to proceed with plans to expand the site. Jefferson Island’s caverns offer 7.5 Bcf of working gas capacity, 720,000 MMcf/d withdrawal capacity and 360,000 MMcf/d injection capacity.

In an interview with P&GJ, Grams discussed the company’s strategy, particularly in regard to storage assets.

P&GJ: How would you describe your natural gas strategy, especially in relation to Golden Triangle?