AGL Resources Inc. subsidiary Golden Triangle Storage Inc. broke ground Wednesday for its 12 Bcf natural gas storage project on the Spindletop salt dome on the southern edge of Beaumont in Jefferson County, TX.

“The project will add much-needed storage, enhance the region’s growing energy infrastructure and provide local economic benefits,” said Dana Grams, president of Pivotal Energy Development, the division of AGL Resources overseeing the project.

Golden Triangle received its certificate from the Federal Energy Regulatory Commission (FERC) at the end of last year (see Daily GPI, Jan. 3). “During our open season [see Daily GPI, May 2, 2007] we received bids for approximately three and a half times the 6 Bcf working gas capacity of the first cavern,” Grams said. “More storage in the area is critical given the increasing importance of the Beaumont region as an energy crossroad where new natural gas supplies, including LNG [liquefied natural gas] imports, meet the nation’s pipeline network that delivers gas to market.”

The project is to have two caverns hollowed out of the Spindletop salt dome, approximately a half-mile to a mile below ground. It also will include a nine-mile header system pipeline to link the storage facility with transmission pipelines. The pipeline will parallel existing rights-of-way for most of its length. Golden Triangle will increase storage capacity in Jefferson County and is expected to enhance the area’s position as a national energy hub and increase the functionality of both its existing and planned energy infrastructure, the company said. It will offer high-deliverability storage at a liquid market point; access to multiple supply sources, including LNG imports; and potential interconnections to six existing and planned pipelines serving diverse markets with counterseasonal demand.

Potential pipeline interconnects include Florida Gas Transmission, Texas Eastern, Centana Pipeline, Houston Pipe Line Co.’s Texoma line, Sabine Pipeline, Kinder Morgan Texas and ExxonMobil’s Golden Pass Pipeline, the company said previously.

Golden Triangle plans to initially offer up to 12 Bcf of working capacity in the two caverns. By adding caverns, the project could continue growing to a maximum of 28 Bcf. Initial commercial operations are slated to begin in late 2010 to early 2011, with the second cavern expected to come on-line in 2012.

The project timetable has been moved back somewhat from what was outlined in the first half of December when Golden Triangle received environmental clearance for the project from FERC (see Daily GPI, Dec. 11, 2007). The project was announced in December 2006 (see Daily GPI, Dec. 8, 2006). Golden Triangle filed for its FERC certificate last year (see Daily GPI, July 3, 2007).

“Because of its proximity to new sources of supply and its ability to serve diverse markets with high deliverability, the project offers customers significant market advantages,” said AGL Resources CEO John W. Somerhalder II.

Seeking to allay fears that natural gas as a fuel source might fall out of favor anytime soon, Somerhalder told shareholders last week that current energy market fundamentals are very favorable to natural gas now and for the foreseeable future, given its environmental and efficiency advantages (see Daily GPI, May 1).

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