NGL Storage
Our NGL and related product storage facilities are integral parts of our operations. Our underground storage wells are used to store our and our customers’ mixed NGLs, NGL products and petrochemical products. Under our NGL and related product storage agreements, we charge customers monthly storage reservation fees to reserve storage capacity in our underground caverns. The customers pay reservation fees based on the quantity of capacity reserved rather than the actual quantity utilized. When a customer exceeds its reserved capacity, we charge those customers an excess storage fee. In addition, we charge our customers throughput fees based on volumes injected and withdrawn from the storage facility. As a result, our profitability is dependent upon the level of capacity reserved by our customers, the volume of product injected and withdrawn from our underground caverns and the level of fees charged.
We operate our storage operations based on the needs and requirements of our customers in the NGL, petrochemical, heating and other related industries. We usually experience an increase in the demand for storage services during the spring and summer months due to increased feedstock storage requirements for motor gasoline production, and a decrease during the fall and winter months when propane inventories are being drawn down for heating needs.
The following table summarizes the gross working capacity of our primary storage assets and our ownership of such capacity (on a net basis in accordance with our ownership interest) by state at February 1, 2010.
NGL and Related Product Storage Facilities by State |
Usable Storage Capacity (MMBbls) |
Texas(1) |
124.4 |
Louisiana |
15.2 |
Kansas |
8.4 |
Mississippi |
5.8 |
Others (2) |
9.6 |
Total (3) |
163.4 |
(1) The amount shown for Texas includes 34 underground caverns with an aggregate useable storage capacity of approximately 100 MMBbls that we own jointly with Duncan Energy Partners. These caverns are located in Mont Belvieu, Texas.
(2) Includes storage capacity at our facilities in Alabama, Arizona, California, Georgia, Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska, Nevada, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota and Wisconsin.
(3) The 163.4 MMBbls of total useable storage capacity includes 23.4 MMBbls held under long-term operating leases. The leased facilities are located in Indiana, Kansas, Louisiana, South Dakota and Texas.