Sorry to come in late on this thread but you are quite right it is not a new concept, has been in operation in the USA since 1905 when the first gas pipeline was run into Chicago. In fact there are 9 major projects underway in the USa in 2009 totalling 154pj, so the 7.5pj here is small beer.
But it does mean the technology is well tried and tested, after all the field has probably been there for a million odd years. It is just a matter of take off rates and injection rates.
According to my reasearch general gas storage development costs in the USA in 2004 were as follows: 9.4 BCF (say 9 PJ), deliverability 147 MMcfd with a total development cost of USD $40m.
For a 2 cycle reservoir the cost of the "working gas storage" is $5 - $6m USD per BCF of working gas capacity.
Therefore a 7.5PJ storage capacity as proposed by MOS will have 3 to 3.5 pJ devoted to base storage, providing pressure etc to the field, and roughly 3.5PJ of "working gas" so project cost could be in the order of $21m USD. Need to update foflation and USD/AUD etc. It at least gives you some idea of the capital required.
You ned to drill new horizontal wells, put in 7000hp electric motors to compress the gas, have two way pipelines for injection, reticulation, deal with water nd any condensate.
So pretty straight forward as an engineering project, as allways the devil is in the detail, and the financial returns. As MOS indicated there is more than one market other than CSG.
Not knowing much about LNG I guess it will depend on the number of "cycles" per year for injection/retic per the LNG plant demands.
Rossco
MOS Price at posting:
15.0¢ Sentiment: LT Buy Disclosure: Held
