Mexico’s natural gas sector is packed with infrastructure challenges, and while the government and its State-owned energy companies have taken aggressive actions to expand the pipeline network, storage remains an obstacle. In the case of LPG, each barrel has to be kept at -40°, resulting in significant expenses. LPG is shipped in oil tankers to the Pajaritos complex, where PEMEX has a cryogenic storage capacity of 2.6 million barrels, which would supply the country for 2.37 days in case of a contingency. Conversely, countries like France and Japan have storage capacities able to supply the country for a couple of months.
There is a LPG surplus in the US, as this fuel is seldom used in this country, thus Mexico could import it in larger quantities, which calls for more storage options, such as pressure vessels, atmospheric tanks , cryogenic tanks, rocky caverns, and saline caverns. There are over 1,500 storage saline caverns in operation, which are not only used to store LPG, as they can also hold crude oil, natural gas, gasoline, diesel, fuel oil, and hydrogen, among other products. Saline caverns represent an attractive option, as they are four times cheaper than pressure vessels.
The Mexican Gulf coast presents several saline formations that, if injected and saturated with water, can form saline formations at depths of 1,000 m underground or more. Since the cavern needs to maintain an even, drop-like form, brine resulting from the injected water is to be used to keep the cavern’s pressure and shape. External infrastructure would be needed to pump both water and hydrocarbons because when gas is extracted, brine is used to fill the space.
CYDSA, a Monterrey-based industrial group, signed a contract with PEMEX to build a saline cavern that will be used to store LPG in Shalapa, Veracruz. It is worth noting that this is the only project of its kind in Latin America. The cavern will be able to store 1.8 million barrels of LPG, providing enough stored gas to supply the country for six days, a meaningful improvement from current numbers. Since the cavern could store the gas usually contained in six oil tankers, the costs of bringing LPG to the country would drop. The investment needed for the project is estimated between US$120-140 million and it is expected to be up and running in 2016.