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Sempra Energy Unit Puts Mississippi Hub Storage Expansion on Hold

Sempra Energy’s U.S. Gas & Power (USG&P) unit has told FERC that it won't pursue a fourth cavern at its Mississippi Hub storage facility in Simpson County, MS, asking the agency to vacate a pending application for expansion of the 22.3 Bcf facility.

Sempra's Federal Energy Regulatory Commission certification for the additional cavern had expired, and USG&P has no plans to pursue the expansion. It is waiting out a market lull before liquefied natural gas (LNG) and Mexico exports kick in to stimulate more interest in U.S. storage.

"Due to current market conditions, USG&P has decided to hold on the expansion at Mississippi Hub," a San Diego-based Sempra USG&P spokesperson told NGI Friday.

Sempra operates 42 Bcf of gas storage in the Gulf Coast region between the Mississippi Hub and its 20 Bcf Bay Gas Storage in southwest Alabama, both of which are linked to various key pipelines in the region, some of which are operated by USG&P (see Daily GPI, Sept. 7, 2011).

"At each of our storage facilities, we are optimizing unused injection/withdrawal capability to create additional value and looking to extend contract durations as market conditions improve," the spokesperson said.

"We anticipate continued improvement in firm rates and optimization revenues as gas demand increases in association with LNG and Mexico exports, power generation and industrial consumption."

Operable since 2010, the Mississippi storage facility has received various approvals from FERC in the past to expand to serve the then-growing Southeast gas market (see Daily GPI, Aug. 24, 2012). The hub holds operational interconnections to three major interstate gas pipelines: SONAT, Transco and Southeast Supply Header.

A second cavern's 7.5 Bcf capacity expanded the facility's total working gas storage capacity to 15 Bcf in 2012, and later a third pushed it to the current capacity. The facility's location provides access to traditional gas supplies in the Gulf of Mexico and along the Gulf Coast, as well as shale gas production and LNG imports. The three pipeline connections provide bi-directional access to major markets throughout the Southeast and Mid-Atlantic regions.

Mississippi Hub has a 450 MMcf/d withdrawal capacity, and the connecting pipelines collectively represent 1.2 Bcf/d of capacity.

The high-deliverability Mississippi Hub Storage is at the Bond Salt Dome and near major interstate pipelines and pipeline expansion projects that access major downstream gas markets, according to Sempra. The facility also has access to emerging shale gas production in East Texas and Louisiana.

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