An affiliate of Boardwalk Pipeline Partners LP has filed an application with FERC requesting that it be permitted to abandon a natural gas storage cavern in Louisiana, citing weak demand for such capacity along the Gulf Coast that's not expected to change in the near future.
Boardwalk Storage Co. LLC wants to sell its Cavern 24, located in Iberville Parish at the Choctaw Gas Storage Facility, to its parent company, Boardwalk Louisiana Midstream, so it can be converted to store natural gas liquids (NGL).
"The capacity and deliverability services associated with Cavern 24 are no longer needed by the natural gas storage market," the company said in an application filed with the Federal Energy Regulatory Commission (FERC) earlier this month. "Weak demand for Gulf Coast natural gas storage capacity is not anticipated to change over the next several years. The proposed abandonment will facilitate the economic and operational efficiency of Boardwalk Storage's remaining facilities by eliminating certain annual operating and maintenance expenses, while allowing Boardwalk Louisiana to provide new service and operational capabilities to the natural gas liquids marketplace using existing, but currently underutilized, natural gas infrastructure."
The company said increasing production from liquids-rich shale plays in the region has spurred demand for such storage services. The company also operates Cavern 25 at the Choctaw facility and said in its filing that it currently has 3 Bcf of working gas capacity uncontracted.
An open season that was launched in June for the available gas closed "without a single bid," the company said in its filing. Service agreements will also begin expiring at the end of this year.
Boardwalk Louisiana is an NGL pipeline and storage operator in Texas and Louisiana. If it abandons Cavern 24, Boardwalk Storage said none of its current customers would be harmed.