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 & Electric's (PG&E)
Line 401 near the Antioch Terminal in the heart of PG&E's
"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
"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.