FERC has given the environmental green light for ANR Pipeline’s project to enhance the working gas capacity at the four natural gas storage reservoirs that the pipeline owns and operates in central and western Michigan.

“We concluded that approval of [ANR’s] Storage Enhancement Project would not constitute a major federal action significantly affecting the quality of the human environment,” FERC staff said in an environmental assessment of the project [CP06-358].

The project calls for ANR, a pipeline subsidiary of El Paso Corp., to make construction improvements and convert base gas to working gas at the Lincoln-Freeman Storage Field and the Winfield Storage Field, and install replacement as well as new compression units at its Goodwell Storage Field. In addition, ANR proposes to convert base gas to working gas at its Reed Storage Field without any construction or modifications to the surface facilities.

ANR said it plans to install three new injection-withdrawal wells, a lateral pipe, a gathering pipeline and associated facilities at the Lincoln-Freeman field; new wells, a lateral pipeline, a gathering pipeline and other facilities at the Winfield field; and two new 7,700 horsepower turbine compressors and ancillary equipment at the Goodwell Compressor Station.

The proposed modifications will result in a net increase in storage capacity and late-season deliverability of 3 Bcf and 112 MMcf/d, respectively, the pipeline told FERC. Currently, ANR has approximately 192 Bcf of storage capacity and 2.9 Bcf/d of design storage deliverability.

In addition to the upgrades, ANR proposes to reduce the storage capacity and working gas currently retained for system balancing to 5 Bcf from 15 Bcf and the associated deliverability and withdrawal transportation capacity to 50 MMcf/d from 150 MMcf/d. “The reduction of this 10 Bcf of operational system balancing gas will not only free up additional storage capacity and deliverability that can be used to meet the increased market needs without adversely affecting existing services, but will enable ANR to develop additional storage services in a more cost-effective manner, as ANR intends to reserve 4.5 Bcf of this gas for use as base gas for a new storage field,” it told FERC.

All told, the enhancements and reduction in operational system balancing gas will allow ANR to provide an incremental 13 Bcf in storage capacity and an incremental 212 MMcf/d of withdrawal capacity, according to the pipeline. It estimated that the cost of the project, which will be constructed in two phases, will be $34.5 million. Phase I is expected to be in service by April 2007.

ANR said it has signed six binding precedent agreements for a total of 17 Bcf of storage capacity in Phase I with BP Canada, Tenaska, Coral, Nexen, Madison Gas & Electric and CenterPoint. The terms range from five to seven years.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.