Natural gas project on horizon

A Salt Lake-based company wants to convert underground salt caverns in central Utah to store up to 45 billion cubic feet of natural gas.

Magnum Gas Storage LLC announced Friday the end of a bidding period for its Magnum Gas Storage Project to be located near Delta in Millard County.

Plans for the 2,150-acre site call for development of eight caverns. Natural gas will be stored in caverns 1,300 to 1,400 feet tall and 300 feet in diameter, located 3,500 to 4,000 feet underground in a naturally occurring salt dome formation.

The company says the project is one of the first large-scale salt cavern natural gas storage facilities to be developed in the western United States. Salt storage caverns are common near the Gulf Coast region in Texas and Louisiana, Magnum Energy managing director Rob Webster told the Deseret News. Natural gas is often stored in underground reservoirs or aquifers, he added.

Magnum plans to build a "Western Energy Hub" in connection with the project, which would be designed to expand the development of renewable energy resources in the West, according to Webster. The hub is designed to become a crossroads of existing and developing electric, natural gas and renewable energy infrastructure such as compressed-air energy storage and solar facilities, he said.

"Historically, gas has been stored seasonally," Webster said. "(Companies) would put it into the ground in the summer when prices are lower and demand is down and pull it out of the ground in the winter when demand is high."

The salt caverns are well-suited for natural gas storage because once formed, they allow little injected natural gas to escape unless specifically extracted. The walls of a salt caverns also have the structural strength of steel, making them much less susceptible to decay and leakage over time, according to the Web site naturalgas.org.

A company fact sheet indicates that two salt caverns, each with working gas capacity of approximately 5.6 billion cubic feet, will be developed initially. The first cavern is expected to be available for natural gas storage beginning in early 2012.

The project still requires some federal permit approval. Webster declined to disclose the overall cost of the project's development.

Webster said the bidding process resulted in 26 inquiries requesting more than four times the project's planned capacity. Magnum will immediately begin working with respondents to develop service agreements.