LONGVIEW — A newly formed energy company hopes to soon call the Port of Longview home to the first liquid propane and butane export terminal on the West Coast. A terminal proposed by Haven Energy, a subsidiary of Sage Midstream, would mean hundreds of short- and long-term jobs for local workers and millions of dollars in tax revenues.
The company's plan calls for propane and butane that is currently being flared, or burned off, in Midwest oil fields to be moved by rail to the Longview export facility. From there, it would be shipped to domestic and foreign energy markets.
A one-year option agreement between the Port and Haven Energy gives both parties time to evaluate the project. The port agreeds not to negotiate with any other party on a similar facility during that time period. The two parties would work to negotiate a commercial property lease and require necessary permits for the facility, the port said. The project would be evaluated under the State Environmental Policy Act for its potential impacts to the environment, including transportation, public services, and environmental health.
Although there are several propane and butane storage facilities in California and a few in Washington, the $275 million Longview terminal would be the first export terminal in the Western U.S. Construction is expected to take about 21 months and require 2,000 jobs.
An existing propane export terminal in Ferndale has the ability to export butane, but has not pursued that option.
Construction jobs, says the company, would pay out $135 million in wages and benefits and generate $17 million in state and local tax revenues.
The terminal project would eventually create 110 to 125 permanent local jobs, Haven estimates. This includes 26 to 35 direct company jobs and 22 direct rail and maritime industry jobs — at above average wages. In addition, the project would create about 68 indirect jobs for suppliers and vendors, Haven estimates.
"This is going to be a great fit for the port and the community," said port CEO Geir-Eilif Kalhagen.
Haven Energy would build two 100-foot tall, fully-contained concrete tanks to store the liquid gases on the port's vacant Berth 4, which the port wants to renovate using newly reimposed property taxes. The liquid gases would be shipped in specially designed tanker cars.
Haven Energy President Greg Bowles estimated two 100-car-long trains would be needed every three days. Trains would use the port's existing rail corridor and not affect any public roads, Bowles added.
Much of the butane and propane, natural byproducts of gas processing and oil refining, being produced in North Dakota's Bakken oil fields is now burned off as waste into the air. Haven will capture these gases at a plant to be built near the oil fields, cool them to a liquid state and ship them to the export terminal in Longview. From there, the propane and butane would be loaded on Panamax-sized carriers bound for markets in Hawaii, Mexico, the U.S. Pacific Coast, Asia and, to a lesser extent, South America.
"These are hydrocarbons that are being burned with no productive use right now. That's what we're recovering and saving those emissions. Over 1 million tons per year of carbon dioxide will be saved. That's the equivalent of almost 200,000 cars from the road," Bowles said, speaking of greenhouse gas emissions.
Port and Haven Energy officials tried to allay any public safety concerns about the commodities.
Haven's two storage tanks will be made from concrete and have a tank-within-a tank design.
The liquefied gases are refrigerated and stored under less than 10 pounds per square inch of pressure — about a third as much as a typical car tire.
"These tanks were designed for conflict zones in highly volatile areas of the world so some guy with an RPG (rocket propelled grenade) couldn't take it out," Kalhagen said
Butane and propane would be shipped in the DOT-112, which are built to a higher standard than the DOT-111 cars used to ship crude oil. DOT-112s extra feature include thermal insulation, built-in shields resistant to puncture and coupling devices to prevent cars from separating in the event of a derailment.
Sage Midstream, Haven's parent corporation, is a privately held company focused on natural gas liquids transportation, marketing, gathering, treating and processing. The company formed in 2012 when private equity firm Riverstone Holdings and oil and gas services company Kaiser Midstream invested $500 million in the partnership.
Kalhagen said the port and Haven Energy will keep the public informed of all project details and development. That process will begin Wednesday, when the company and port host two public informational meetings, one at 3 p.m. and another at 6 p.m., at the Cowlitz County Expo Center in Longview.
Columbian Business Editor Gordon Oliver contributed to this story.