Products & Services
for Salt Caverns
 

Brine Production: In this case, caverns are a by-product of brine production. As brine is produced, a cavern is created and enlarged. Brine can be sold for use in drilling fluids for drilling oil and gas wells or can be used to make salt or other chemicals. Once caverns have reached their maximum permitted size or can no longer be operated efficiently, brine production stops, and the caverns are either left filled with brine or are used for other purposes, such as storage or disposal.

Hydrocarbon Storage: Salt caverns have been used to store various types of hydrocarbons since the 1940s. The types of products that have been stored in these caverns include liquefied petroleum gas (LPG), propane, butane, ethane, ethylene, fuel oil, gasoline, natural gas, and crude oil.

The largest underground storage operations in the United States are part of the U.S. Department of Energy's (DOE's) Strategic Petroleum Reserve (SPR). The SPR currently stores about 560 million barrels of crude oil in 62 caverns located at four sites in Louisiana and Texas.
Efforts are underway to add another 28 million barrels of crude oil to these sites.
Waste Disposal: Salt caverns represent secure repositories located far below the earth's surface. Several proposals have been made in the United States, Mexico, and Europe to dispose of hazardous chemical wastes in salt caverns, but as of 1999, none have received regulatory approval. In the United States, the DOE, after years of careful study, opened its Waste Isolation Pilot Plant (WIPP), in a bedded salt formation in New Mexico. Although the WIPP was created through conventional mining techniques rather than through solution mining, DOE's decision to place a nuclear waste disposal facility in bedded salt is an indication of the protection offered by salt formations.

Clean Energy Storage: Energy captured at off-peak times can be stored as compressed air and released when pricing is higher.
Caverns #2 and #3 are unused and have capacity of approximately 650,000 barrels of material. The site also includes a salt water disposal well that has been used for brine disposal from cavern creation and produced water disposal from oilfield operations.

A compelling feature of this site is the optionality associated with it, and the factors that mitigate risk associated with investment in the site.

1. The Olgess facility was previously operated as a disposal site. The property owner Funderburk Underground Storage, Inc. formerly leased the site to an outside operator. It is equipped with truck receiving, offloading, and fluid storage. The saltwater/brine disposal well used by the operator has undergone a workover which has it ready for significant continued use.

2. Two caverns remain that are suitable for disposal of (NOW) having an estimated 675,000 bbl.'s of cavern space currently.

3. These same caverns are astride of a Natural Gas pipeline, a Volatile liquids pipeline and adjacent to or near to a number of petroleum product systems and pipelines. At present, a number of companies operate wells in the area.

4. The productive strata in the area include conventional oil (Woodbine, Austin Chalk) and unconventional Eaglebine conventional gas (Cotton Valley & others) Barnett Shale, Haynesvilte Shale, and Bossier Shale plays. Along with the Eaglebine, Lower Cretaceous zones below the Eaglebine - the Buda, Georgetown, Edwards, and Glen Rose - are also known to have significant oil potential in the area.

5. The site is well positioned near what can be the largest NORM accumulations in the world. The genesis of this statement comes from the fact that NORM accumulations in tubulars, wellheads, vessels, and pipelines has a direct relationship with high chloride content in reservoirs, fracking, and increases with the amount of time the reservoir has been produced.

Figure (below) lists larger companies with Haynesville acreage that are logical customers for disposal of produced water, drilling mud, and cuttings and a lot of NORM.

For Natural Gas prices, it was business, as usual, for much of 2020, with Henry Hub spot prices swinging wildly, dropping to a yearly low of $1.33/MMBtu, before rebounding sharply to $3.14/MMBtu during the week of Oct. 26-30, and rising as high as $3.67 the week of July 19 this year according to [IA data. That is an increase of 275% from the low of 2020. 36 drilling rigs are operating in Northern Louisiana this week and 17 rigs in East Texas Districts 5 & 6 amount to just over 12% of all rigs operating in America

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