Minnesota retailer prepares for winter’s worst, boosts bulk storage

Propane retailers hit multiple roadblocks in the fall and winter of 2013-14 – crop drying season business increased; a polar vortex struck most of the United States; and propane prices soared in January. And for any propane dealer in the Upper Midwest, the Cochin Pipeline shut down.

Minnesota-based Pirkl Gas dealt with all of these roadblocks. Greg Pirkl, the company’s owner, says the loss of the Cochin Pipeline took out about 40 percent of the region’s supply, causing problems for many retailers.

“Some people in [our] area have ready access to rail close by or pipelines,” Pirkl says. “But the loss of the Cochin Pipeline put us down to one functioning pipeline in the area.”

Pirkl adds that the escalating cost of propane came as one of the biggest shocks last winter. According to the U.S. Energy Information Administration, propane wholesale prices spiked to about $4.50 a gallon in Minnesota the last week of January and averaged $2.50 for the month.

“I had never seen price increases like I did last year,” Pirkl says. “I think the whole industry got caught off-guard.”

To fight the supply shortage, Pirkl added four 45,000-gallon propane storage tanks, supplied by Apache Stainless Equipment Corp., to his Owatonna, Minn., plant in 2014.

Historically, Pirkl Gas has gradually added storage between its Meriden and Owatonna plants, but Pirkl says last year’s addition was the largest to date. With the addition, Pirkl Gas has a 500,000-gallon capacity for propane storage.

“In our situation, I wanted to have a good supply when we have a bump in the road,” Pirkl says. “With the permanent reversal of the Cochin Pipeline, we decided now was the time to do this.”

Pirkl says his company began work on the installation project in November 2013. However, he admits the process was anything but smooth. Pirkl Gas experienced pushback from both the Minnesota Public Utilities Commission and Minnesota Pollution Control Agency because of the amount of propane tanks being added to the plant at one time. He says this stalled the project for about six months.

After getting help from state employees and receiving all approvals at the local and state levels, Pirkl says the process progressed to tank installation by September. LPG & NH3 Supply teamed with Pirkl Gas to install the four Apache tanks. Pirkl says the installation was possibly the smoothest part of the process.

“I can sleep easier at night, knowing we can ride out a while if something happens again,” Pirkl says.

Storage over the years
While Pirkl Gas added four propane storage tanks to one of its plants last fall, owner Greg Pirkl says the company has gradually expanded the number of storage tanks at both of its plants the last two decades. Pirkl says he plans to add about 90,000 gallons of storage to his Meriden plant in the future.

1995 – Starts with an 18,000-gallon tank at its Meriden plant
1996 – Adds one 30,000-gallon tank at its Owatonna plant
1999 – Adds one 30,000-gallon tank at its Owatonna plant
2005 – Adds three 30,000-gallon tanks at its Meriden plant
2010 – Adds two 30,000-gallon tanks at its Owatonna plant
2013 – Adds two 45,000-gallon tanks at its Meriden plant

COMPANY: Pirkl Gas

LOCATION: Owatonna, Minn.

FOUNDED: 1959 (original), 1995 (propane business bought)

EMPLOYEES: 7

CUSTOMERS: 1,600

PROPANE SALES: 2.5 million annual gallons

Photo: Pirkl Gas