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AGL Plans New Salt Dome Storage at Spindletop in Texas

AGL Resources said it is planning a $180 million 12 Bcf storage facility in the Spindletop salt dome in Beaumont, TX, with the potential to increase the field's working gas capacity to 36 Bcf.

The Golden Triangle Storage field would provide up to 900 MMcf/d of deliverability to local petrochemical markets, markets in the Houston Ship Channel area via intrastate pipeline connections, and to markets in the Northeast, Mid-Atlantic and Southeast via connections with interstate pipelines.

"The Golden Triangle Storage project is an attractive option to serve customers' growing needs for natural gas storage in the region," said Dana Grams, president of AGL's Houston-based subsidiary, Pivotal Energy Development. "Because of its proximity to new sources of supply and its ability to serve diverse, counter-seasonal markets with high deliverability, the project offers customers significant market advantages. The initial response has been very positive."

AGL touted the liquid market points near the East Texas project, as well as easy access to multiple supply sources, including liquefied natural gas imports, and potential interconnections with up to eight existing and planned pipelines serving diverse markets.

Pivotal Energy Development expects to finalize engineering plans and obtain regulatory permits to begin construction in 2008. The first cavern is slated to begin operations in 2010, with a second 6 Bcf cavern operational in 2012. The facility would be located on 90 acres of private land over the Spindletop salt dome at the southern end of Beaumont.

Golden Triangle Storage will provide firm and interruptible storage, including parking, loaning and wheeling services. It will offer multiple injection and withdrawal cycles with up to nine turns per year and 450 MMcf/d of injection capacity. The project will provide nearly 9.4 Bcf/d of direct market access as well as an additional 4.5 Bcf/d of capacity on planned pipeline expansions in the area.

Depending on customer interest, potential interconnects may include Florida Gas Transmission, Texas Eastern, Centana Pipeline, Houston Pipe Line Co.'s Texoma line, Sabine Pipeline, Kinder Morgan Texas, ExxonMobil's Golden Pass Pipeline and Enbridge's planned Clarity pipeline.

The project will provide storage for producers in the Barnett Shale and Bossier plays and the deepwater Gulf of Mexico and will be located near 8-11 Bcf/d of expected LNG import capacity from terminals along the Sabine-Lake Charles corridor.

Two other salt dome natural gas storage fields operated by Duke's Centana Intrastate and Entergy Gulf States, currently are located in the area, providing about 15 Bcf of working gas capacity. However, the influx of new production and imported LNG, along with the growth of gas-fired power generation, has created significant demand for additional gas storage capacity in the region. At least nine other new storage projects are planned in East and North Texas that could provide more than 71 Bcf of new working gas capacity.

Parties interested in the Golden Triangle project should submit nonbinding bids for firm storage by Jan. 15 for the initial 6 Bcf of working gas capacity with an expected in-service date of first quarter 2010. For more information about the project and the bid process, contact Ed Gottlob at (832) 397-1798 or Rob de Cardenas at (832) 397-3881 or visit the Golden Triangle Storage website at www.goldentrianglestorage-texas.com or www.gts-texas.com.

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