Given its favorable geology that supports high-quality salt dome structures, the U.S. Gulf Coast has been the heart of liquid hydrocarbon cavern storage in the U.S., with multiple NGL/Olefin cavern sites scattered across Texas and Louisiana. Based on the latest public records, the U.S. Gulf Coast has an aggregate salt cavern storage capacity of ~806 Million Bbls, 77% of which is in Texas. Within the state of Texas, the town of Mont Belvieu (60 miles east of Houston, TX) holds the largest concentration of salt cavern structures: 68% (or ~422 Million Bls) of all Texas Cavern storage capacity is located in Mont Belvieu (technical name of the salt dome – Barbers Hill) with estimated working capacity estimated at 285 million Bbls. While there is plenty of cavern capacity, availability of brine/brine pond capacity at Mont Belvieu has always been a limiting factor on volume of product that could be stored at Mont Belvieu. The data reported by cavern operators supports the fact that effective or usable Mont Belvieu storage capacity has been limited by the availability of brine at Mont Belvieu since at least 2016, when we started collecting and analyzing the data.

 It is no coincidence that inventory levels at Mont Belvieu have been limited to ~100 Million barrels until mid-2019, when new brine pond capacity was added at Mont Belvieu. However, the impact of COVID-19 has revealed new facets of Mont Belvieu storage capacity and its limitations. COVID-19 led to demand destruction in the U.S. and triggered a race to identify new market outlets and storage capacity for liquid hydrocarbons.