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Caledonia Energy Gets Environmental Nod for Storage Project in Mississippi

FERC last Wednesday gave environmental clearance for Caledonia Energy Partners to convert a nearly depleted natural gas reservoir in Monroe and Lowndes counties, MS, into a high-deliverability, multi-cycle storage field with the capacity to store 11.7 Bcf of working gas.

"The [FERC] staff concludes that approval of the proposed project, with appropriate mitigating measures, would not constitute a major federal action significantly affecting the quality of the human environment," according to the environmental assessment of the Caledonia Energy project [CP05-15].

The storage project would have an initial maximum withdrawal capacity of 330 MMcf/d and a maximum injection capability of 260 MMcf/d when it goes into operation in the spring of 2006, the Dallas, TX-based company said. Caledonia Energy held an open season for the proposed storage capacity last summer (see NGI, May 17, 2004). The facility is expected to have interconnections with Tennessee Gas's 500 Leg, Texas Eastern Transmission Corp. and Southern Natural Gas.

The project calls for the construction of eight new injection/withdrawal storage wells, three 3,550 horsepower gas engine compressor units and associated facilities at a new compressor facility site, and approximately two miles of small-diameter connecting pipelines.

Caledonia Energy reached an agreement in the fall of 2003 with Nicor Inc. subsidiary Nicor Exchange LLC to provide marketing support for the development of the storage facility. Nicor Exchange, Nicor's storage marketing and optimization unit, will lead the project through the marketing stages of development.

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