PAA/Vulcan Gas Storage LLC, a joint venture between Plains All American Pipeline LP and Vulcan Capital, said it purchased an additional 240 acres of land adjacent to the proposed 24 Bcf Pine Prairie Energy Center (PPEC) gas storage project near near Pine Prairie, LA, in order to provide space for future expansions. The company said that along with existing acreage the additional land could provide space for another 11 salt caverns, bringing ultimate working gas capacity to 112 Bcf.
The facility, which is currently under construction, is located about 50 miles from the Henry Hub in Louisiana. It is designed to have three 9.6 Bcf storage caverns each with 8 Bcf of working gas capacity. Deliverability is expected to reach 2.4 Bcf/d and the maximum injection rate is expected to be 1.2 Bcf/d when the facility is completely developed.
PAA/Vulcan said it has completed drilling operations on two of three cavern wells and drilling operations on the third cavern commenced in late December. Leaching operations on the first cavern well began in November 2006, construction of the gas handling and compression facilities began in December 2006 and construction on the pipeline interconnects is anticipated to begin during January 2007. The initial phase of the project is expected to come online later this year and the three caverns are expected to be placed in service in stages over the next three years.
The company also already has started the process to expand the facility. PAA/Vulcan said it intends to file an application for an expansion with the Federal Energy Regulatory Commission in the near future.
"Construction of the Pine Prairie facility began in earnest following the acquisition of PPEC's parent company [from Sempra Energy] by PAA/Vulcan in late 2005," said Plains All American CEO Greg L. Armstrong (see Daily GPI, Sept. 19, 2005). "We believe PPEC is poised to become an important part of the infrastructure required to support increasing demand for natural gas storage, including the new LNG regasification terminals currently being constructed in the Gulf Coast area.
"Our expanded land position will support up to 11 additional storage caverns and our business strategy, which is comparable to that of our crude oil storage facility in Cushing, is to build additional storage to meet rising demand over time."
Pine Prairie has commitments from a variety of customers for substantially all of the storage capacity of the first three caverns for periods ranging from three to five years. These customers include utilities, marketers, producers and LNG-related participants.
Agreements also have been signed for a 75-mile pipeline header system to be connected to a total of seven interstate pipeline systems serving consumer markets in the Midwest, Northeast and Southeast. In addition, the company plans to pursue additional interconnects with pipeline infrastructure to be constructed in support of LNG regasification facilities along the Gulf Coast.
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