Black Bayou seeks US FERC approval for 34.7 Bcf Gulf Coast salt dome gas storage project

Black Bayou Gas Storage has pitched a salt dome storage facility with 34.7 Bcf working gas capacity near the Texas-Louisiana border along with two looping 27-mile pipelines linking the facility to multiple interstate gas pipelines.

The company filed an abbreviated application July 17 with the US Federal Energy Regulatory Commission seeking approval by June 1, 2025, with the goal of starting service on the first two caverns by the fourth quarter of 2028 and the final two by late 2030 (CP24-494). Pipeline construction is targeted to start in the third quarter of 2025, with proposed wheeling services beginning in early 2026.

The application comes as the last two years have witnessed renewed interest in US gas storage reminiscent of a major buildout in the late 2000s. The new boom has been partly driven by growing price volatility and increased demand intermittency that has drawn buyers such as LNG exporters, power generators, utilities and pipeline operators seeking short-term storage optionality.

According to data from S&P Global Commodity Insights, some 96 Bcf/d in salt dome storage capacity is planned to be added by 2031 along the US Gulf Coast, including the Black Bayou project.

Salt dome projects have gained interest because of their faster turn rate, compared with depleted fields or depleted aquifers.

Project details

The roughly $400 million Black Bayou Gas Storage Project is planned in Cameron Parish and Calcasieu Parish, Louisiana; the salt dome is situated about 18 miles south of the Gulf of Mexico coastline and less than 25 miles from industrial demand in Lake Charles, Louisiana, and Port Arthur, Texas, the application said.

The facility is slated to provide up to 1.6 Bcf/d of maximum daily injections and as much as 2 Bcf/d of maximum daily withdrawals.

The overall project comprises four salt storage caverns, a 44,000 hp compressor station, two 27-mile, 24-inch-diameter looped, bidirectional pipelines linking the caverns to multiple interstate pipelines. It also entails a leaching plant, which will draw raw water to the salt dome and the flow rate needed for solution mining, and nine saltwater disposal wells.

According to the application "the project will utilize the Black Bayou salt dome to provide high turn natural gas storage services, and the project's header pipelines will be interconnected to 10 interstate natural gas pipelines in the Gulf region, allowing the project to provide the gas balancing needs of a broad range of customers interconnected to the natural gas grid, including gas-fired electric generation facilities, local distribution companies, LNG liquefaction and export facilities, natural gas producers, natural gas marketers, and others."

The developer is seeking permission to provide storage and hub services under market-based rates.

The "high-deliverability" storage facility will provide about 8.7 Bcf of working gas capacity per cavern, the application said. Including base gas of about 4.5 Bcf per cavern for operational support, the project will provide about 52.7 Bcf of total gas storage capacity.

Black Bayou Gas Storage is a subsidiary of privately held Black Bayou Energy Hub.

In 2008, Black Bayou Storage, then a unit of Kaiser-Francis, received a FERC certificate for a 14.9 Bcf, four-cavern storage facility in the same location. That prior project was not developed, however, "for various market and commercial related reasons," the application said. While the site has changed ownership, Black Bayou Gas Storage has leased an interest in the site.

Seeking to demonstrate market support for the project, Black Bayou said it is requesting market-based rate authorization and thus will bear all of the financial risks, including those tied to unsubscribed capacity. The company has executed one precedent agreement for 8 Bcf of firm storage with a foundation customer, according to the application.

Addressing environmental impacts, the applicant said the storage site has long been used for oil and gas exploration "and thus is previously disturbed." The header pipelines would be about 89% co-located with existing facilities and common rights-of-way to reduce the impacts, the application added.