Six years after FERC granted Orbit Gas Storage a certificate of public convenience and necessity for construction and operation of a proposed underground natural gas storage facility in Hopkins County, KY, the company has asked the Commission to vacate the certificate due to changed market conditions.
The Federal Energy Regulatory Commission issued a certificate to the Henderson, KY-based storage developer for the 13 Bcf Kentucky Energy Hub Project in 2009 (see Daily GPI, Feb. 9, 2009). Orbit proposed to convert the depleted White Plains Gas Field to gas storage and build an approximately 22-mile pipeline header, compressor station and associated facilities. The project would have an estimated 5 Bcf of working capacity and 8 Bcf of cushion gas, with the capability to deliver and inject gas at a rate of approximately 100 MMcf/d, the company said [CP08-409]. It would interconnect with ANR Pipeline near Rabbit Ridge, KY.
In granting the certificate, FERC said the project would be located in a competitive market, serve demand in a region that was experiencing growth in natural gas usage, and enhance storage options available to pipelines and their customers.
From the start, Orbit's plans were hampered by a sluggish economy and changes in the natural gas marketplace. The certificate required Orbit to complete the facilities and make them available for service by Feb. 5, 2010, but the company requested, and was granted, a series of extensions, first until Feb. 5, 2012, a second until Feb. 5, 2014, and a third until Feb. 5, 2015. The final extension was necessary "because of the prolonged economic downturn and the effects of shale gas developments," Orbit said in its request.
Those same hurdles finally brought the project to an end this week, with the company filing a request Thursday for FERC to vacate the certificate without prejudice.
"Due to changed market conditions for storage, Orbit does not intend to pursue construction of the Kentucky Energy Hub Project at this time," Orbit said. "However, Orbit sustains the project's vital assets, rights-of-way, and leases and continues to pursue market interest."