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Golden Triangle Halts Work on Storage Site Due to Violations

AGL Resources' Golden Triangle Storage Inc. (GTS) subsidiary last Monday notified FERC that it has halted construction at its storage site due to noncompliance with the agency's conditions in its certificate order. The company said it has taken corrective actions and has asked FERC's Office of Energy Projects (OEP) for permission to resume construction in limited areas -- the brine line and disposal sites areas.

"On July 2...GTS identified certain instances of potential noncompliance of activities not approved under GTS' certificate order, as occurring outside the GTS '2008 Construction Facilities' footprint as approved by the Commission" in May, GTS Counsel Kristian Mark Dahl said in a letter to the Federal Energy Regulatory Commission last Monday. In mid-May FERC gave Golden Triangle permission to begin construction of its 12 Bcf natural gas storage project on the Spindletop salt dome at the southern edge of Beaumont in Jefferson County, TX.

Upon discovering the noncompliance or potential noncompliance activities, Golden Triangle said it issued a "self-imposed order halting all construction activities, pending a more detailed investigation of the activities and further guidance and specific authorization from the OEP."

Some of the noncompliance incidents involved the clearance of an area that was used for parking; the installation of a temporary water line from the LNVA Canal; use of an existing access road; and relocation of electrical poles owned by an oilfield production operator.

To prevent future noncompliance, the storage company said it has mobilized an AGL Resources environmental engineer from the Atlanta corporate office to the job site to oversee environmental inspection and ensure that the FERC permit conditions "are properly monitored, reported and the management control system is functional."

In addition, Golden Triangle said it intended to contract with a new environmental inspector (EI) to replace the current one; clarify the EI's role on the job site and his FERC responsibility; conduct refresher environmental training for all AGL and contractor management, supervisors and engineers on the job site; develop a check list that can be used by site supervisors to help them identify situations where potential permit violations could occur; and improve the project site markings to clearly identify the construction/site footprint.

Based on these corrective actions, Golden Triangle has asked FERC's OEP to "provide limited authorization for GTS to restart construction and thereby continue work in the areas of the brine line and brine disposal sites only, which are within the designated 2008 construction facilities footprint and lie west of and outside of the 90-acre central storage site."

The project calls for Golden Triangle to initially offer up to 12 Bcf of working capacity in two caverns. By adding caverns, the project could continue growing to a maximum of 28 Bcf. Initial commercial operations are slated to begin in late 2010 to early 2011, with the second cavern expected to come on-line in 2012. Golden Triangle also plans to build a nearly nine-mile pipeline heading northeast from the storage site into Orange County, TX, to connect the facility with three interstate and three intrastate pipelines (see NGI, July 9, 2007). FERC approved the storage project in late December (see NGI, Jan. 7).

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