Meeting Demand in the Northeast

Targa, Eastern Liquids Partner to build terminal at Sparta Junction, N.J. to provide a winter safety net.

Unheralded, pipelines go on allocation and refinery operators announce their facility is being taken off line for repairs, right in the heart of the winter heating season. The result: sleepless nights for propane marketers who lie awake wondering when, where, and how they will be able to obtain product, and if it can be safely transported over icy highways.

As of last December, marketers in the Northeast started looking forward to fewer wakeful nights when Targa Midstream Services LP's (Houston) new rail terminal in Sparta, N.J. went into operation. Built on 5.6 secure acres owned by Eastern Propane (Oak Ridge, N.J.), the new (Targa Midstream Services’ new Sparta terminal features four 60,000-gal. Trinity storage tanks, as well as four transport loading stations. The $3-million, 5.6-acre facility also affords side-track storage for up to 50 rail cars.)

facility features four 60,000-gal. Trinity storage tanks, eight railcar unloading stations, four transport loading stations, one transport unloading station, four bobtail loading stations with methanol injectors, and one truck scale. Eastern Propane’s wholesale sister company, Eastern Liquids LLC, is the sole operator and Targa, which has a long-term lease and operating agreement with Eastern, exclusively controls supply in and out.

Since opening, the state-of-the-art terminal has pumped more than 3.5 million gallons. said Bill Daly, Targa’s marketing manager for the Northeast, who noted that prior to the Sparta opening, Targa didn’t have a footprint in the Northeast. “The new terminal has the ability to comfortably handle 30 million gallons in a season. We anticipate this facility will meet our supply needs for the near future,” he said, “but as additional needs emerge, we might at some future date consider constructing additional infrastructure, perhaps in upstate New York.”

The new terminal became operational on Dcc. 16, and the opening ceremony was held Feb. 7. The festivities featured a luncheon, a reception, and a dinner aboard several historic dining cars provided by the New York Susquehanna and

(This historic photo, circa 1909, shows the Sparta Junction freight house, which was strategically placed to serve both the New York Susquehanna & Western and the Lehigh & Hudson River railways. The Lehigh tracks cross the picture. The interchange tracks are not visible.)

Western Railway (NYS&W; Cooperstown, N.Y.). Eastern Propane, a company owned and operated by the Nicholson family for three generations, has had a relationship with NYS&W that goes back more than 30 years. The luncheon, attended by invited guests that included vendors, contractors, and industry members, was followed by a ribbon-cutting and walking tour of the $3-million facility.

With total rolling and site storage capacity in excess of 4 MMgal., the terminal has the ability to meet even acute demand spikes, said Eastern Liquids and Eastern Propane president Robert (Rob) Nicholson III. The historic Sparta Junction terminal also receives, stores, blends, and supplies propellant gasses as well as food-grade rail-to-truck transfers to Fortune 100 companies. Eight propane rail cars can be unloaded simultaneously at the new terminal, and up to 50 rail cars can be accommodated on side-track storage.

Fast-rising regional demand and the reliability of rail delivery drove the decision to construct the terminal, which was built on land owned by Eastern Propane since the 1960s and is the location of the company’s own major bulk storage terminal. The 38-acre site includes 18 developed acres and an additional 20 acres planned for subdivision and development for additional rail-to-truck commodities.

“The Northeastern U.S. has been experiencing exponential residential and commercial growth,” Nicholson observed, “and the propane supply infrastructure has not kept up with consumer demand. In nine of the last 10 years, it has been (Four bobtail loading stations with methanol injectors are in place at Sparta Junction, where bobtails are able to load in six minutes. The terminal, which has back-up generator capacity, has the ability to comfortably handle 30 MMgal. during a winter heating season.)

rail supply in the Northeast that has maintained customer demand during the winter heating season when the pipeline goes on allocation and the region's refineries, which operate at maximum capacity during the winter months, seem to go down during peak demand periods. There has been a large propane consumer market that periodically has been short of product during the winter.”

Nicholson added that in the past 20 years, he doesn’t remember a winter season when a pipeline allocation, refinery disruption, or transportation issue due to bad weather didn’t negatively impact wholesale supply to the region. “We’ve come to depend on the Sparta rail terminal, and not only for Eastern’s own needs, but other propane companies have sent their transports here over the years to access product. At times we’ve acted as an emergency supply wholesaler of last resort. I’m pleased that this problem has been corrected with the addition of the Targa terminal. It’s a huge burden that's been lifted.”

Construction of the terminal, located just a 15-minute drive from Interstate 80, commenced on April 1 of last year, and a six- to nine-month completion goal was planned.

(Targa and Eastern officials gather at the opening celebration. From left are Targa's John Gawronski and Bill Daly; Eastern chairman of the board Robert B. Nicholson; Deborah Gerndt and Stan Hoffmann of Targa; Eastern president Rob Nicholson; Bill Mumford of Targa; and Peter Gilman, Eastern Liquids general manager. )

“We wish we could have come on line in October, but we were pretty much on time,” Nicholson said. “We had a very rainy

summer and fall which slowed down excavation, welding, and installation of our underground electric lines and propane piping.”

“It was one of the rainiest summer and fall seasons in the region's history,” added Peter Gilman, Eastern Liquids’ general manager who served as construction manager for the terminal. “This led to many challenges to stay on schedule. In early August Rob gave me a list of his selected vendors, suppliers, and contractors, introduced me to his design engineer, Jerry Stocker, representatives from Targa Resources and the NYS&W Railway Corp., and then he said, ‘Ahead of schedule and under budget. OK?’ We did it, despite the challenges.”

Eastern Propane’s president had high praise for his team of employees and the vendors contracted to construct the facility. “Like most projects where there are deadlines, contractors cross over each others' work in all ways imaginable,” Nicholson said. “Time frames and work areas are always overlapping. To their credit, there was never any tension. In fact, they often shared ideas across trades through impromptu brainstorming sessions. It was a pleasure to have worked with such a dedicated, knowledgeable, and professional team during construction of the terminal.”

(Eastern Propane and Eastern Liquids president Rob Nicholson, right, welcomes guests, from left, Nash McMahan and his father, Keith McMahan, of Tri-Gas & Oil Co. Inc. (Federalsburg Md.), Mary Ellen Daly, and Bill Daly, Targa Northeast marketing manager.)

The Targa terminal features 3500 feet of liquid and vapor gas piping, four Corken 691 vapor compressors with 30-hp motors, four Corken Z-4500 liquid pumps with 25-hp motors, and 13 emergency shut-down (electric-nitrogen) actuators. Compressor performance is rated at 1280 gpm, while pump capacity is 1240 gpm.

The facility also has a 625-sq-ft electric utility/maintenance building and a 672-sq-ft structure that houses the scale office, a bathroom, and a multi-purpose room. The terminal has back-up electric generator capacity, and is wired for a security surveillance camera system and an automatic gate and keycard system. Bobtails can load in six minutes and transports in less than 21 minutes. For now, the facility is operating from 6 a.m. to 3 p.m., based on current demand. However, infrastructure and plans are in place to quickly open the terminal 24/7 if warranted.

“Central to building the terminal was to have the highest quality in all areas to serve the terminal’s drivers and customers,” Nicholson said. “In order to do this, we tried to see the plant through the eyes of the drivers. When you take this approach there are three things that a driver wants in a terminal: a fast round trip and a safe, easy place to load. Each move through the terminal was taken into account and scrutinized,” Nicholson added. “Our objective was to have drivers leave the terminal, go back to their company and say that the trip was fast, easy, and safe. Word travels.”

For example, Nicholson noted, when a terminal in the region recently shut down for repairs, 12 unanticipated transports showed up the next morning. “The first sentence out of many of the new drivers’' mouths was ‘how long is the wait?’ When we told them they’d be leaving in about 30 minutes they were delighted and surprised, especially the contract haulers. Time is money to them. If a driver has to wait in line for two hours to load, how much money did he save. At the Sparta terminal, time saved is money saved.”

Quick Loading

Nicholson said at Sparta the scale house time is two minutes, in/out; hook-up and disconnect, nine minutes; load time, six minutes bobtails, 21 minutes transports; terminal maneuvering time, two minutes round trip. Total time: bobtail 17 minutes; transport, 32 minutes.

“The terminal was designed and constructed with 70 years of driver and professional engineer input taken into consideration,” the third-generation Eastern Propane president said. “Each detail was prepared and reviewed on paper, then reconsidered during the construction stage of the facility. Driver and employee recommendations were sought and implemented for increased safety and efficiency during the construction process. We wanted everyone’s input in (Industry members, vendors, contractors, and other invited guests pause for a photograph during a walking tour of the Sparta Junction rail terminal. The grand opening festivities included a luncheon, a reception, and a dinner aboard several historic dining cars provided by the New York Susquehanna & Western Railway.)

order to make this the safest and most expedient terminal.”

“This terminal was definitely designed and constructed around the transport and bobtail driver-safety and speed of process,” added Gilman. “The goal of the facility was to have a terminal available to the Northeast marketplace at a site that was easy and convenient to access, and could load and process a driver in the shortest period of time. My office is at the terminal scale, and I smile each time I overhear a driver say, ‘this is the fastest facility to load at.’ They hit the easy button when they receive their bill of lading and then they go on their way.”

Targa Northeast marketing manager Daly, a 30-plus-year industry veteran, said the independent mid-stream company chose Eastern as its partner in the Sparta Junction terminal because of its demonstrated leadership in propane distribution and system installations in the New York, New Jersey, and Pennsylvania tri-state region.

He added that Eastern’s location provided Targa a strategic Northeast distribution presence where it previously had none, and that Targa’s strategy is to partner with well-established, well-run companies. “We wanted a partner who could meet the highest quality and safety standards. Eastern Propane is among the most respected propane marketing companies in the country, and the Nicholson family has a 68-year history of safety, success, and propane industry contributions,” Daly said. “Targa’s decision to partner with them was based on those factors.”

—John Needham