Avista, PG&E GT Plan Gas Storage in Washington
The storage-poor Pacific Northwest could get some needed relief
in the near future. Avista Corp. and PG&E Gas
Transmission-Northwest (PG&E GT-NW) have joined forces to
investigate building another underground natural gas storage
facility in an aquifer in eastern Washington near the
interconnection of PG&E GT-NW and Williams (Northwest Pipeline)
at Stanfield, OR.
Avista's Patricia Grable said it is premature to speculate on
what the ultimate deliverability or capacity of a new project could
be. But Avista Corp. CEO Tom Matthews said it could prove "of
similar value [as Jackson Prairie] to our company in the future."
Avista is part owner with Williams of the Jackson Prairie
underground storage facility in western Washington, which currently
is undergoing an expansion to 18 Bcf of working gas capacity from
15 Bcf and to 850 MMcf/d of deliverability from 550 MMcf/d. The
only other storage facility in the region is Northwest Natural
Gas's Mist (OR) facility 50 miles northwest of Portland. Mist also
is rolling out the first part of an eight-year, $122 million
expansion this year. The first phase will increase working gas
capacity at Mist to 8.5 Bcf from only 6.5 Bcf and will raise
deliverability to 125 MMcf/d from 80 MMcf/d.
New demand records set this winter in Northern California
demonstrate the need for greater access to gas supply, according to
PG&E GT-NW President Thomas B. King. Pacific Northwest gas
demand growth, which has been averaging a strong 5%/year throughout
most of the 1990s, isn't showing signs of letting up. "We are
exploring various alternatives to best meet the need for additional
natural gas supply in the Pacific Northwest, including both gas
storage and new pipeline capacity," said King. "This current
agreement will help us determine the economic viability of new
storage development in areas accessible to both Northwest and
Avista and PG&E GT plan to begin drilling and geologic
testing of the site during the second quarter. "The testing program
will provide the additional information we need to determine
whether it is in the economic interest of our company and its
shareholders to continue to participate in the development of this
site over the next three to four years," said Matthews.
PG&E GT and Avista also may face some additional storage
competition in the region in the near future. Western Hub
Properties LLC (WHP), which is developing the Lodi Gas Storage
project near Lodi, CA, announced last fall that it too was
searching for locations to develop up to four new
high-deliverability gas storage hubs in the Pacific Northwest over
the next five years. The company still has not announced any of
those locations, however.
Competition will be "limited by the geology," said Peter Lund,
vice president of gas transportation and storage of PG&E GT.
"There just isn't that many great sites up here. We hope we've got
one here. The geology is basically volcanic rock. It's not like
Texas or Louisiana where you have a lot of spent gas fields and
salt dome capability. There's a lot of demand for storage but
there's not a great deal of identified sites at this point in time.
"We generally canvassed the Northwest and chose this location as
the one that has the most strategic potential from the standpoint
of the right geology and proximity to the pipeline system. For all
intents and purposes it's at Stanfield.
Lund said if the project gets the green light storage operations
probably would begin in four or five years.
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