Unocal Corporation Plans to Develop the First Bedded Salt Dome Gas Storage Facility in the Rocky Mountains

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Unocal Midstream & Trade (Houston, Texas), a business unit of Unocal Corporation (NYSE:UCL) (El Segundo, California), has set up the Unocal Windy Hill Gas Storage LLC company to develop its new underground natural gas storage facility in Morgan County, Colorado. Unocal Windy Hill has already drilled the first well to a depth of over 6,500 feet to test the thickness, quality, and properties of the Permian salts and will test the brine injection dynamics of the Cretaceous era sandstone formations.

To be located near Brush, Colorado, the proposed natural gas storage facility will be developed in three phases, with a total storage capacity of nine billion cubic feet of natural gas. Phase I will have a storage capacity of three billion cubic feet of storage, with injection and withdrawal rates of 100 million and 400 million cubic feet per day. Surface facilities will include a 7,000-10,000 horsepower compressor station, gas processing, and pipeline laterals. The location of the facility will allow it to serve the Cheyenne and Greensburg natural gas hubs, as well as the Denver and Front Range markets through proposed pipeline interconnections with Cheyenne Plains, CIG, Xcel, and future interconnections with Southern Star, AIG Ralston, and Kinder Morgan Intrastate.

Unocal Windy Hill plans to construct the storage project as an interstate facility and has notified the FERC of its intension to do so. Construction could begin on the more than $40 million project in the spring of 2006, with completion slated for late 2007.

The Windy Hill project is one of 74 natural gas storage projects, representing more than $20 billion in total investment value planned to be built in the U.S. Most of these projects are LNG, however there are numerous large scale salt dome storage and depleted reservoir storage projects planned. Click on the image at right to view a chart showing the distribution of these projects by state.

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