Avista, PG&E Plan More Tests for Storage Field
Avista Corp. and PG&E Gas Transmission-Northwest (PG&E
GT-NW) are inching closer to adding a new gas storage field in the
storage-poor Pacific Northwest region and have petitioned FERC for
an exemption from Section 7 certificate requirements in order to
further test the site.
Since announcing the proposed Columbia Hills storage project last spring, the
two companies obtained leases and drilling permits from the Bureau of Land
Management and drilled two wells to test the layered basalt geology at the
Benton County aquifer (see NGI, April 5, 1999).
"The results obtained from drilling Well No. 1 revealed that
there are zones that warrant additional testing for potential
natural gas storage," the company told FERC. As a result, they
formed a joint venture called Stanfield Hub Services LLC. PG&E
GT-NW will remain project manager and will continue to manage
proposed testing and drilling activities. But the company needs an
exemption from FERC to continue feasibility testing pending a
determination on whether to proceed with the project. Testing will
require drilling at least six more wells and conducting
hydrogeologic and water chemistry testing on the additional wells.
If the tests are successful, the company intends to apply to the
Commission for a Section 7c certificate.
"The public interest is plainly served by permitting LLC to
conduct its preliminary testing of the site in the temporary manner
proposed in this petition. LLC is proposing to develop a
significant new gas infrastructure facility to serve the growing
Pacific Northwest market, using a new storage technology. Without
conducting the preliminary testing and drilling activities, LLC
will have no basis for an informed business decision about
developing the site and the public could lose the benefits of have
a new storage site developed," the company told FERC. Because the
activities may yield wells that could later be incorporated into a
jurisdictional storage facility, the company believes it is
appropriate to seek a "temporary acts or operations" exemption.
The exemption requested is consistent with Commission precedent,
the company said, referring to Commission actions on other storage
projects involving Avoca Natural Gas Storage, Central New York Oil
& Gas and others.
The storage project if built would be located in Washington
across the border from the Stanfield Hub in Oregon, where the
interstate pipelines of PG&E GT-NW and Williams (Northwest
Pipeline) connect. Despite the desperate need for gas storage in
the region, unfavorable geology has left the market with only two
other facilities within several hundred miles, both of which
recently underwent expansions.
Avista is part owner with Williams of the Jackson Prairie
underground storage facility in western Washington, which recently
was expanded 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 rolled out the
first part of an eight-year, $122 million expansion last year. The
first phase increased working gas capacity at Mist to 8.5 Bcf from
only 6.5 Bcf and raised deliverability to 125 MMcf/d from 80
But PG&E GT and Avista also may face some additional storage
competition in the region in the near future. Western Hub
Properties LLC, which is developing the Lodi Gas Storage project
near Lodi, CA, as well as another storage facility in Bakersfield,
CA, is searching for locations in the Pacific Northwest to develop
new high-deliverability gas storage hubs. The company still has not
announced any of locations, however.
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