Black Bayou gas storage hub receives final regulatory approval

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(The Center Square) – Black Bayou Gas Storage has received the final federal authorization the company needed to begin construction and operate a large-scale gas storage hub in Cameron and Calcasieu parishes that encompasses four salt domes and related infrastructure.

The Black Bayou development project is located less than 25 miles from 10 current and planned LNG export facilities that analysts project will process 30 billion cubic feet (Bcf) of gas per day by 2030, about double the liquefaction plants’ current capacity.

Located about seven miles from the Louisiana-Texas border, the gas storage hub could serve LNG exporters in Cameron and Calcasieu parishes and in the Port Arthur area.

According to Mercuria, one of the world’s largest energy trading firms and a partner in the Black Bayou project, the storage hub will help to balance gas markets both locally and globally.

“Strategic infrastructure projects like this are essential to our broader mission of enhancing market efficiency and supporting the energy transition,” said Boris Bystrov, managing director of Investments at Mercuria. “We are proud to back the development of this highly flexible and commercially significant asset in the heart of the U.S. Gulf Coast,” Bystrov said.

Black Bayou would have the ability “to provide storage and wheeling services to a wide range of energy consumers and suppliers, helping to balance the ever-changing needs of a dynamic global energy market,” Mercuria said in a news release. With connections to ten major interstate pipelines, Black Bayou would be one of the most interconnected balancing and wheeling hubs in the Gulf Coast region, according to Mercuria.

The Black Bayou project includes the development of four salt dome storage caverns with capacity to hold 34.7 Bcf of gas, two 27-mile-long bi-directional header pipelines, a 44,000-horsepower natural gas-powered compressor station, and a cavern leaching plant with nine freshwater wells and nine saltwater disposal wells.

The storage hub is designed to deliver up to 2.0 Bcf of gas per day to LNG export facilities and other customers, and to inject up to 1.6 Bcf per day into the salt caverns. These extremely high deliverability rates would enable the hub to supply large volumes of gas during periods of peak market demand such as extreme weather events or high LNG plant activity, helping to prevent price spikes, according to Mercuria.

The Federal Energy Regulatory Commission (FERC) issued an Environmental Assessment on April 18 that concluded the Black Bayou storage hub would not significantly impact the ecosystem provided recommended mitigation measures are implemented. Black Bayou formally accepted the FERC Certificate on Aug. 22.

Project partners include Black Bayou Energy Hub LLC, Mercuria, Charlestown Energy Partners, Cameron Prairie Sporting Club, and Tomac Cove Investment Partners.

Tad Lalande, CEO of Black Bayou Energy Hub, said the project is backed by strong partners with commercial depth and global market understanding.

"We are advancing toward FID with a contracted portfolio of strategically located gas storage assets underpinned by long term commercial agreements with a diversified portfolio of credit-worthy, market leading customers, positioning the project to meet the growing demands of LNG, power, and industrial customers across the Gulf Coast and beyond," said Lalande.

While the initial focus is natural gas, the salt domes could also serve as storage for other energy products such as crude oil, propane, butane, and hydrogen.

 Black Bayou Gas Storage received a Certificate of Public Convenience and Necessity from FERC this week.