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TPC Founders Form New Company, Plan Western Storage

TPC Founders Form New Company, Plan Western Storage

Larry Bickle, John Strom and Chris Jones, the three founders of TPC Corp. (formerly Tejas Power Corp., which was sold to PacifiCorp in April of last year) haven't lost sight of their goal of developing a large network of new high-deliverability storage hubs. But in contrast to TPC, Western Hub Properties LLC (WHP), their new company formed in April, plans to focus on the West rather than building projects in the eastern U.S.

WHP plans to develop up to five new high-deliverability gas storage hubs in the Pacific and Pacific Northwest regions over the next five years. The first project, Lodi Gas Storage, which originally was the project of Northern California Gas Storage until WHP purchased the company in June, is expected to begin operations in October of next year, would provide storage and hub services near Lodi, CA, 20 miles south of Sacramento. The facility would provide service directly to Pacific Gas &amp Electric's (PG&ampE) Line 401 near the Antioch Terminal in the heart of PG&ampE's market.

"The electric restructuring in California, with the gas-fired plants changing ownership outside the traditional utility generator, is what we think will change the gas buying patterns that will make the multiple-turn, high-deliverability storage extremely valuable," said WHP President Tom Dill. "The seasonal storage is great for seasonal demand swings. But the high-deliverability will handle within-the-week swings, and that will have value to the electric generators."

With storage services from the highly permeable depleted Lodi field, WHP intends to offer customers six-cycle per year storage service, similar to what is offered by Gulf Coast salt cavern storage operations. The company expects the facility to have an average injection capacity of 200 MMcf/d and withdrawal capacity of 200 MMcf/d with 6 Bcf of working gas capacity and the possibility of a major expansion.

Dill said WHP intends to file an application for the project this month with the California Public Utilities Commission for intrastate storage service, but also intends to file with FERC to provide some interstate service to customers in the Pacific Northwest until it can develop other new facilities farther north.

"Washington and Oregon have substantial growth in gas demand, and most of it is low-load factor growth, which is ideal for the type of storage that we want to focus on. So in the eight-state region [of the Pacific Northwest] we're intending, in addition to Lodi, to do three to four more projects over the next five years. [It's] aggressive but possible." Dill would not disclose any other locations for the company's planned storage hubs. He also would not disclose the rates being offered for service at Lodi. The company intends to file for market-based rates and plans to keep costs confidential.

"We do not have any signatures on the bottom line today, but we're close with a few," he said. The company plans to hold an open season, offering 6 Bcf of working capacity and associated injection and withdrawal rights in November. Interested parties should contact Jim Fossum at WHP's Sacramento office, (916) 488-1961.

The Lodi project would be the second merchant storage facility being developed in California. The first is the Wild Goose storage project, which is being developed by Alberta Energy Co. about 50 miles north of Sacramento in a depleted dry gas field. Wild Goose is expected to begin operations next April with 14 Bcf of working gas capacity, firm withdrawal capability of 200 MMcf/d and injection capability of 80 MMcf/d.

Rocco Canonica

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