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Three Storage Projects Obtain FERC Nods

FERC has issued a certificate to Enstor Houston Hub Storage and Transportation LP authorizing the construction and operation of a salt dome natural gas storage facility and associated pipeline facilities in Liberty County, TX. At the same time the Federal Energy Regulatory Commission (FERC) last week issued favorable environmental assessments of two other storage projects -- Colorado Interstate Gas Co.'s (CIG) project near Denver and Tarpon Whitetail Gas Storage LLC's project in Mississippi.

Enstor Houston Hub proposes to site the storage facility on the North Dayton Dome near the town of Dayton, approximately 30 miles northeast of Houston. When fully developed, it would have a total capacity of 46.32 Bcf comprised of 30 Bcf of working gas capacity and 16.32 Bcf of cushion gas.

The company plans to develop four storage caverns in two phases. Houston Hub said each cavern would have a capacity initially of 6.175 Bcf (4 Bcf working gas and 2.175 Bcf cushion gas) for a total capacity of 24.7 Bcf (16 Bcf working gas and 8.7 Bcf cushion gas). The caverns under this phase of the project would be operational in 2009, according to Houston Hub, which is a subsidiary of Houston-based Enstor Inc. and Enstor Operating Co. LLC. Enstor Inc. is a subsidiary of PPM Energy Inc., which is owned by ScottishPower.

Houston Hub said it would then take the caverns out of commercial service one at a time, as service and market conditions allow, for additional solution mining to increase the capacity of each cavern to a total of 11.58 Bcf comprising 7.5 Bcf of working gas and 4.08 Bcf of cushion gas.

It projects that the storage facility would have a withdrawal capability of 1 Bcf/d and injection capability of approximately 0.6 Bcf/d. Houston Hub anticipates that the caverns will reach full capacity by 2012.

Houston Hub also plans to build a pipeline header consisting of two 2.34-mile, 24-inch diameter, bidirectional pipelines, connecting the storage facility to two interstate pipelines -- Natural Gas Pipeline Co. of America and Transcontinental Gas Pipe Line.

The company said it anticipates that customers of the proposed storage facility would include local distribution companies, electric utilities, merchant power generators, industrial customers, natural gas marketers and producers serving markets in Texas, the Midwest, Gulf Coast, Southeast and Northeast.

FERC approved Houston Hub's request for market-based rates for its proposed firm and interruptible storage and interruptible hub services. "The Commission's authorization to charge market-based rates places the economic risks associated with the project entirely on Houston Hub," the agency order said [CP07-390].

The Commission also provided Houston Hub a waiver of the shipper-must-have-title policy for services in connection with its proposed storage facility.

Enstor, through its affiliates and subsidiaries, owns and operates storage projects across North America, including a facility in Katy, TX, and one in Lea County, NM.

In other storage developments, El Paso's CIG has obtained environmental approval of its proposal to convert a depleted oil and gas field near Denver for use as a natural gas storage facility.

"Approval of this project would not constitute a major federal action affecting the quality of the human environment," the FERC staff concluded in its environmental assessment of the storage project [CP08-30].

The proposed Totem Gas Storage facility, to be located 34 miles northeast of Denver, would provide natural gas storage to meet the existing peak-day and load-growth needs for local gas distribution systems along the Colorado Front Range area, according to CIG. It would have total capacity of 10.7 Bcf, comprised of 7 Bcf of working gas and 3.7 Bcf of base gas.

The project calls for the installation of eight new horizontal injection and withdrawal wells, a 1.4-mile small diameter pipe and the installation of 9,400 horsepower of natural gas-fired compression.

The proposed storage facility would connect with CIG's existing pipeline network via CIG's 164-mile High Plains expansion project, which FERC approved in March (see NGI, March 24).

CIG said it hopes to begin construction in the second quarter of this year, with the storage project going into operation in June 2009.

Tarpon Whitetail Gas Storage's facility to be sited in Aberdeen, MS, also received a favorable environmental assessment, putting it one step away from receiving a FERC certificate.

The Whitetail project will be a depleted reservoir facility ultimately capable of storing 8.6 Bcf.of working gas with injection capacity of 200 MMcf/d and withdrawal capacity of 300 MMcf/d [CP08-46]. Houston-based Tarpon Whitetail said it expects to receive a certificate by June of this year, with the facility going into service in spring 2009, subject to regulatory approvals.

The project calls for Tarpon Whitetail to build up to 20 injection/withdrawal wells and associated facilities; an interconnection with Texas Eastern Transmission (Tetco) pipeline; about 4.9 miles of 24-inch diameter header pipeline; one mile of 16-inch diameter pipeline; and 14,200 horsepower of compression.

Whitetail will initially interconnect with Tetco in its M-1 market transportation zone. Future plans are to connect to multiple pipelines in the immediate vicinity. These include Tennessee Gas Pipeline on its 500 Leg, Southern Natural Gas and Mississippi Valley Gas Co.

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