Alberta Energy Company (AEC) has pulled the Manchester GasStorage Facility in Oklahoma out of the legal quagmire surroundingthe Mountain Energy bankruptcy. AEC subsidiary Salt Plains StorageInc. purchased Manchester, which is located in Grant County, OK,for $42 million last month.
The Manchester plant, which is similar in size to AEC’s otherU.S. storage facility — Wild Goose Storage in California — has15 Bcf of working capacity in a depleted gas field. AEC will renameit Salt Plains Gas Storage Facility.
Salt Plains Storage President Rick Daniel said all claimsagainst the facility have been shifted to the proceeds from thesale. “The various claimants now will try to have their claimsresolved out of the proceeds of the sale of the storage assets,” hesaid. “It allows us to go ahead and operate the facility free ofall these claims.”
The purchase was approved earlier this month by the FederalBankruptcy Court for Northern Oklahoma. The assets of the storagefacility were owned by two companies that filed for voluntarybankruptcy in mid December because of ties to Mountain Energy,which had come under a barrage of complaints for, among otherthings, allegedly converting for its own use gas that it wasstoring on behalf of other companies.
The storage facility was under a temporary restraining orderafter TransCanada Energy Marketing USA Inc., Tenaska MarketingVentures, Farmland Industries and DuCoa LP all petitioned the U.S.Bankruptcy Court for the Western District of Missouri to forceMountain Energy into bankruptcy. They claimed they were out $24.6million because of their business dealings with Mountain Energy.
Some of those claims alleged that the storage business atManchester had some liability, which is what prompted the previousowner to file for voluntary bankruptcy.
“The bankruptcy really had more to do with claims arising fromsome of the commercial side of the business as it was previouslybeing operated,” said Daniel.
AEC’s purchase had been on the table long before the MountainEnergy problems, he said. “The storage facility itself we view as avery good, sound storage facility.
“Salt Plains is ideally located in a region where demand fornatural gas as a primary fuel for heating and power generation isgrowing,” said Daniel. “Salt Plains is ready to contract storagecapacity starting April 1.”
Located about 110 miles north of Oklahoma City, Salt Plains istied to the Williams Central and Oneok Gas Transportationpipelines, which serve both regional and continental gas markets.Salt Plains can inject 100 MMcf/d and withdraw and 200 MMcf/d ofgas, giving it relatively high deliverability for a depleted fieldoperation. It will be offering both long- and short-term firmstorage services effective April 1.
Daniel said there are a couple of existing contracts but a “fairamount” of space is available. He said the facility historicallyserved a wide variety of customers, including producers, marketersand end-use industrial customers in the Midcontinent region.
AEC is Canada’s largest gas producer and North America’s largestindependent gas storage operator. Its main facility is the AECO CHub in southeastern Alberta. Its other facilities include storageat Hythe, AB, Wild Goose Storage near Gridley, CA, plus leasedstorage capacity in the Gulf Coast and Midwest regions. AEC’s NorthAmerican gas storage network has a total capacity of 133 Bcf.Withdrawal capability is more than 2.5 Bcf/d.
For information about leasing opportunities at Salt Plains,contact Ben Ledene, vice president of market development at (403)266-8192 or by e-mail at email@example.com.
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