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FERC OKs In-Service Delay of Florida Peak-Shaving Facility

FERC on Thursday approved a Houston-based start-up company's request for additional time to complete construction and place into service the first liquefied natural gas (LNG) peak-shaving storage facility in Florida.

The Floridian Natural Gas Storage Co. LLC (FGS) project, which FERC approved in August 2008, had been required to go into service this month (seeDaily GPISept. 4, 2008). FGS requested an extension until August 2015. The agency said "no" to a two-year delay, but it granted FGS an additional one year to finish the project. "Based upon the facts presented, Floridian is granted an extension of time until and including Aug. 29, 2014 to complete construction of the authorized facilities and make them available for service," the Federal Energy Regulatory Commission order said [CP08-13].

"Floridian indicates that because of the economic downturn after the issuance of the certificate [in 2008], the proposed project has been stalled. However, Floridian states that commercial interest in the project has revived, resulting in Floridian agreeing upon the terms of a precedent agreement with a foundation customer. Floridian further states that it is...in active negotiations with multiple downstream customers," the order said. Asked who the foundation customer was, an FGS spokesman said the company was working with BP plc.

The downstream customers include those who will use liquefied natural gas (LNG) in Florida and those who plan to export LNG, FGS told FERC earlier this month. Moreover, FGS is in negotiations to reach commercial arrangements with two additional customers, one of which is a Florida utility, FGS said.

And it has received expressions of interest for gas transportation services from multiple sectors in the Florida energy market, according to FGS.

FGS said it continues to retain control of the project site and that all permits have been maintained or extended. FGS proposes to site its peak-shaving facility on the 145-acre Florida Steel Superfund site near Indiantown in Martin County near the Florida Gas Transmission and Gulfstream Natural Gas System LLC pipelines, as well as build pipeline facilities to interconnect with Gulfstream and Florida Power and Light Co. The majority owner of FGS is Targa Resources Inc.

According to the FERC order, FGS plans to downsize its certificated Phase I facilities to build a 1 Bcf tank and associated 400 MMcf/d of vaporization, in lieu of a 4 Bcf tank and 400 MMcf/d of vaporization. FGS said it expects to file an application amending its 2008 certificate later this month.

 The request for the deadline extension did not apply to the Phase II facilities, which include a liquefaction system with the capacity to process 100 MMcf/d, one LNG storage tank, a vaporizer system and a gas liquids storage system. Assuming regulatory approvals are forthcoming, FGS anticipates these facilities going into operation by no later than March 2016.

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