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Three Gulf Coast Storage Projects Totaling 37 Bcf of Capacity Receive FERC Nods

The Federal Energy Regulatory Commission last Wednesday issued certificates to two storage operators to build new natural gas storage facilities and expand existing storage operations along the Gulf Coast, and also awarded a preliminary determination (PD) on non-environmental issues to a third storage operator.

The agency gave the green light to Caledonia Energy Partners to convert a nearly depleted natural gas reservoir in Monroe and Lowndes counties, MS, into a high-deliverability, multi-cycle storage field with the capacity to store 11.72 Bcf of working gas, and to Freebird Gas Storage LLC to carry out a Phase II expansion of the East Detroit Gas Storage Field in Lamar County, AL. It also awarded a PD to EnCana affiliate Starks Gas Storage LLC to develop 19 Bcf of gas storage capacity in southwestern Louisiana, with a maximum withdrawal rate of about 800 MMcf/d.

The three projects, when completed, would add about 37 Bcf of working gas storage capacity to the Gulf Coast region, according to FERC staff members. "We like to see storage projects added to synchronize" with new LNG facilities, said Commission Chairman Pat Wood.

The Caledonia Energy storage project would have an initial maximum withdrawal capacity of 330 MMcf/d and a maximum injection capability of 260 MMcf/d when it goes into operation in the spring of 2006, the Dallas, TX-based company said. The facility, which would supply 11.7 Bcf of additional working capacity at market-based rates, is expected to have interconnections with Tennessee Gas's 500 Leg, Texas Eastern Transmission Corp. and Southern Natural Gas [CP05-15].

The project calls for the construction of eight new injection/withdrawal storage wells, three 3,550 horsepower gas engine compressor units and associated facilities at a new compressor facility site, and approximately two miles of small-diameter connecting pipelines.

Starks Gas Storage, which is located about 25 miles west of Lake Charles, LA, plans to construct a two-cavern salt dome gas storage facility in two phases and a 35-mile, 30-inch diameter header pipeline system, which would connect to Transcontinental Gas Pipe Line, Tennessee Gas Pipeline and Texas Eastern.

The Commission denied Starks Gas Storage's request for a waiver of the Order 636 unbundling requirements. It might make sense to waive these requirements at a later time, "but not today," said Commissioner Joseph Kelliher. Commissioner Suedeen Kelly was more steadfast. "We should not change that [unbundling rule], if at all," she said. She noted that she was "very reluctant" to consider any exceptions to the unbundling requirement.

Freebird Gas Storage seeks to expand the working gas capacity of its existing 1.44 Bcf reservoir storage field by 6.5 Bcf and construct a five-mile pipeline connection to Tennessee Gas Pipeline just upstream of Compressor Station 550.

The expanded capacity is due to be in operation in the latter third quarter to early fourth quarter of 2005, according to Freebird Gas, an Alabama limited liability company that was formed to construct, expand and operate the East Detroit storage field. Houston-based MultiFuels LP is the primary interest owner of Freebird Gas Storage.

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