eCORP Storage History & Evolution
ENHANCED OIL RECOVERY (“EOR”) – By the beginning of the 1980s, eCORP had become the largest independent operator of unconventional oil recovery projects in the state of Texas, second only to Shell Oil, as measured by state regulatory permits, H-1 Applications to Inject Substances for the Purpose of Enhanced Oil Recovery. In addition, the Company had secured a countrywide concession for EOR in Bolivia. eCORP principals have also been involved in one of the largest CO2 flood projects – the Two Freds Field near Pecos, Texas. Oil economics and federal energy policies promulgated during the mid-1980s caused the Company to refocus its business interest to the midstream of the natural gas sector.
NATURAL GAS STORAGE – In the last 25 years, eCORP has come to be regarded as one of the most prolific independent natural gas storage developers, owners and operators in the U.S, with particular expertise in depleted reservoir storage. eCORP has been involved in the development, operation, sale and acquisition of approximately one-fifth of all new storage capacity additions since U.S. interstate pipeline deregulation which occurred circa 1985. The Company and its principals have either built or been directly involved in managing the development or acquisition of thirteen storage facilities with a total working capacity of several hundred BCF. Specifically, the principals of eCORP have been directly involved in developing or acquiring the following projects.
Depleted Oil and/or Gas Fields – These reservoirs are naturally occurring, and their potential as secure containers has been proven over the millions of years that the reservoirs held their original deposits of oil and gas. They consist of porous and permeable underground formations that are confined by impermeable rock or water barriers and identified by a single natural pressure.
- Stagecoach Natural Gas Storage Facility, Tioga County, New York
- Stuart Natural Gas Storage Facility, Hughes County, Oklahoma
- Katy Hub and Natural Gas Storage Facility, Harris County, Texas
- Grama Ridge Storage Facility, Lea County, New Mexico
- Freebird Gas Storage Facility, Lamar County, Alabama
- Caledonia Gas Storage Facility, Lowndes County, Mississippi
- Rotherwood Gas Storage Facility, Harris County, Texas
- Bammel Field, Harris County, Texas
- Hester Field, St. James Parish, Louisiana
Salt Cavern Storage – This type of facility uses caverns mined in underground salt deposits such as salt domes or salt formations.
- Moss Bluff, Liberty County, Texas
- Egan Gas Storage, Acadia Parish, Louisiana
- North Dayton, Liberty County, Texas
- Waha Gas Storage, Reeves County, Texas
eCORP has provided a number of financial and marketing innovations in the U.S. storage marketplace, as well as having generated considerable intellectual property and project management capabilities within the Company to deliver the most cost effective, market responsive and environmentally sensitive storage solutions. These accomplishments are illustrated in the following profiles of the Stuart and Stagecoach facilities.
Stuart Natural Gas Storage Facility in Oklahoma: Oklahoma’s largest electric power utility had an urgent need for a high performance storage facility (i.e. a facility where the injection and withdrawal rates are high enough to complete more than one cycle per year) to manage fuel supply to a major electric generating station. However, all of the depleted oil and gas fields proximate to the generating station were judged by an independent petroleum engineering firm to be unsuitable for such storage development due to the large number of vertical wells required to achieve high performance in low quality reservoir rock (low porosity and permeability) found in the fields.
In response, eCORP pioneered a solution that combined horizontal drilling techniques, unique reservoir modeling capabilities and completion methods (Salternatives Technology) to develop high performance, low-cost storage. Salternatives Technology ushered in a new class of natural gas storage allowing depleted reservoirs located in close proximity to large gas consuming markets or near other sources of gas to be developed into high performance gas storage facilities. Today, the Salternatives technology is more appropriately classified as proprietary knowledge and is widely emulated.
This depleted gas field technology and expertise has become ever more important as demand for natural gas increases, and supply and demand become more unpredictable. Because of its environmentally friendly attributes, natural gas has become the fuel of choice for new power plants, especially highly flexible gas-fired peaking plants that burn natural gas as a fuel in highly efficient gas turbines. High performance natural gas storage facilities that are located in close proximity to these new power generating facilities can provide the following benefits:
- Reliable supply of natural gas when deliverability from long haul pipelines is restricted
- Flexible fuel supply management capabilities providing optimum economic benefits
- Production management capability enabling optimum marketing of gas production
- Fully dispatchable electric service
- Avoidance of costly fuel gas conditioning and compression equipment if gas storage facility is sole supplier of gas to power generation facility
Stagecoach Natural Gas Facility: The Stagecoach Natural Gas Facility (an American Institute of Architects Award winning design), located in the state of New York and depicted below, was completed by eCORP in 2002 and sold in 2005 to Inergy, L.P. in 2005 for 12.5X EBITDA. The facility, depicted below, is capable of delivering 500 million cubic feet of natural gas per day through the enclosed compressor station. The building, which contains 25,000 HP of state-of-art, zero-emission, electric-drive turbine compression, employs the use of indigenous rock walls, protected by planted berms and a full-coverage roof-top garden seeded with local species of wild grasses. These environmental and view-shed mitigation features, including minimal downward-directed night lighting, qualify the structure and site for LEED recognition. LEED (or Leadership in Energy and Environmental Design) is the rating system of the U.S. Green Building Association. This Stagecoach Natural Gas Storage Facility substantiates eCORP’s track record of drilling some of the most prolific horizontal wells in the United States. eCORP wells drilled on this project represented the highest producing rate wells ever drilled in the United States at the time.