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FERC Accepts Bid for Utah Gas Storage Facility

FERC has accepted an application by Magnum Gas Storage LLC to construct and operate a high-deliverability, multi-cycle salt cavern natural gas storage facility in central Utah, which would be the first large-scale underground gas storage facility to be developed in the western United States, Magnum said.

Magnum, which is owned by Magnum Development LLC, a Haddington Ventures LLC portfolio company, said in August a nonbinding open season for the project generated responses from 26 bidders that requested more than four times the capacity offered (see NGI, Aug. 10).

When completed, the facility would consist of four salt caverns with a combined total working gas storage capacity of 42 Bcf, said Magnum, which is based in Salt Lake City. The project would be capable of injecting up to 0.3 Bcf/d and withdraw up to 0.5 Bcf/d, with inventory cycled from nine to 12 times a year.

Magnum Managing Director Rob Webster said the "Gulf-style" salt cavern project would offer new options to electricity and natural gas producers.

"The marketplace is increasingly being driven by the intermittent fuel supply of natural gas-fired electric generation," he said. "Storing energy allows producers to lower risks and optimize resources by balancing fluctuations of consumer supply and demand."

The project, according to the Federal Energy Regulatory Commission filing, also is to include a 61.5-mile, 36-inch diameter header pipeline that would extend to interconnections with Kern River Gas Transmission Co. and Questar Pipeline Co. near Goshen, UT.

Initially, two salt caverns are to be developed at the site through solution mining, each with working gas capacity of 10.5 Bcf. The first salt cavern is expected to be available for gas storage service beginning in early 2012.

A storage facility in central Utah, Webster said, would "enhance the existing natural gas infrastructure by providing seasonal storage and short-term cycling and balancing services to interstate pipelines, natural gas producers, gas-fired electric generators, local distribution companies and gas marketers." Developing an energy storage facility in the Rockies, he added, also would provide "the necessary infrastructure for the expansion of renewable resource development in the region."

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