Atmos Pipeline and Storage LLC is seeking FERC approval of an arrangement that would allow for the transfer of ownership of an agency-approved 25 Bcf storage project in Louisiana to a new subsidiary that was set up for the purpose of owning and operating the Fort Necessity Storage Project.

Such a transfer “will enable Atmos [Pipeline] to seek additional or alternative investments in the Fort Necessity Storage Project by third parties,” Atmos Pipeline said in its application to transfer ownership. “Third-party investments in the Fort Necessity Storage Project are currently difficult to effectuate because of the breadth of Atmos’ existing and unrelated investments and operations.”

Fort Necessity Natural Gas Storage LLC is a new company owned by Atmos Pipeline, a subsidiary of Atmos Energy Holdings Inc. Atmos Energy Holdings, in turn, is wholly owned by Dallas-based Atmos Energy Corp., which is one of the largest all-natural gas local distribution companies in the United States, providing gas sales and transportation service to about 3.2 million customers in 12 western and southern states.

Atmos Pipeline is asking the Federal Energy Regulatory Commission for authority to abandon its certificate, which the agency issued in June, and instead grant a certificate to Fort Necessity Natural Gas to build and own the storage project (see Daily GPI, June 19).

The Fort Necessity project calls for the construction of three underground salt dome caverns in the Fort Necessity salt dome formation, approximately 12 miles south-southwest of Winnsboro, LA. The three caverns would have a combined total capacity of nearly 24.75 Bcf, of which 15 Bcf would be working capacity [CP09-22].

The proposed facility would have an average injection rate of 375 MMcf/d and a maximum injection rate of approximately 500 MMcf/d, while the average withdrawal rate would be 750 MMcf/d and maximum withdrawal rate would be approximately 1.5 Bcf/d, according to Atmos Pipeline.

The project would involve the construction of approximately 7.4 miles of pipeline interconnecting with the mainline facilities of Tennessee Gas Pipeline, Columbia Gulf Transmission, ANR Pipeline and Regency Energy Partners LP.

Atmos has targeted the first cavern to be operational by early 2011 and the other two caverns to be in service by 2012 and 2014.

Atmos Pipeline said the transfer of ownership should not alter FERC’s previous decision to allow it to charge market-based rates for firm and interruptible storage, hub and wheeling services.

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