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FERC OKs Northern Natural Storage Upgrades in Iowa, Kansas

FERC has issued a certificate to Northern Natural Gas clearing the way for it to provide a total of 6 Bcf of additional firm delivery service for customers served by its storage fields in Iowa and Kansas.

At its Cunningham Storage Field in Pratt and Kingman Counties, KS, Northern Natural plans to convert 4 Bcf of storage capacity, currently allocated for interruptible service, to storage capacity used for firm deferred delivery (FDD) by installing increased compression horsepower. The $6.2 million project will not require a change in the current maximum certificate storage capacity of the depleted reservoir field (62 Bcf), but it would raise the maximum certificate injection rate at Cunningham to 545 MMcf/d from 500 MMcf/d, and the withdrawal rate to 720 MMcf/d from 650 MMcf/d.

At the Redfield Storage field in Dallas County, IA, Northern Natural's proposed facility enhancements (water handling facilities) would allow it to increase its maximum withdrawal rate by 35 MMcf/d to 460 MMcf/d. The project also would raise the maximum working gas capacity by 2 Bcf to 122 Bcf, the pipeline said. Northern Natural pegged the cost of the Redfield facility upgrade at $2.85 million.

The MidAmerican Energy pipeline said it has executed precedent agreements with Northern States Power Co. in Minnesota and Wisconsin for the entire 6 Bcf of incremental FDD storage service. The two shippers have requested terms of 21 years beginning June 1.

The Federal Energy Regulatory Commission approved the pipeline's request to roll in the costs of the Cunningham and Redfield storage upgrades in its next Section 4 rate proceeding. Northern Natural "[has] demonstrated that the FDD rates would decline when project costs are rolled into currently effective rates, providing existing shippers with a net benefit...We thus find that it is appropriate to permit Northern to roll in the...project costs" for the two storage field enhancements, the order said [CP05-410, CP05-411].

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