Duke Energy Gas Transmission (DEGT) completed its $62 million purchase of the remaining stake in the Saltville storage facility in southeastern Virginia from AGL Resources. With AGL's 50% stake, Duke now owns the entire high-deliverability storage project, which it plans to continue expanding to serve growing demand and liquefied natural gas imports in the Mid Atlantic region.
"This acquisition of the remaining interest in Saltville Storage complements our existing East Tennessee Natural Gas (ETNG) system, providing us with opportunities to expand Saltville Storage and assist our customers in optimizing their transportation positions," said DEGT President Martha Wyrsch. "This transaction helps position DEGT to continue to grow over the next several years."
Wyrsch previously noted that high deliverability storage will play an increasingly important role in managing price volatility, demand surges from gas-fired power generation and large amounts of supply entering the pipeline grid from LNG terminals such as Dominion's Cove Point facility on the Chesapeake Bay.
Saltville Storage, which began commercial operation in summer 2003, currently has a working gas capacity of about 2 Bcf. It is expected to reach 6.2 Bcf of working capacity in 2007 and potentially could be expanded to 12 Bcf of capacity. Deliverability is expected to reach 900 MMcf/d in 2007 with an injection capacity of 400 MMcf/d. The geologic formation in the area provides for the only high-deliverability salt cavern storage facility between Alabama and New York.
In addition to Saltville Storage, other hard assets involved in the transaction include a nearby previously developed salt cavern and related facilities with a working gas capacity of about 1 Bcf, a 77-mile-long, 8-inch-diameter natural gas pipeline known as the P-25 line and the Early Grove storage field. The P-25 pipeline stretches from Saltville to Radford, VA, running parallel to DEGT's ETNG pipeline system. The Early Grove facility, site of the first natural gas discovery in Virginia, is a depleted underground natural gas reservoir and related assets with a working gas capacity of about 1.5 Bcf.
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