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Lodi Gas Storage Holds Storage Expansion Open Season in Northern California

In an effort to gauge interest in a possible expansion of its storage facilities in Northern California, Lodi Gas Storage LLC (LGS) said it is conducting an open season for additional firm natural gas storage services.

The expansion will be for 7 Bcf of natural gas capacity (5 Bcf of working capacity) with 100,000 MMBtu/d of firm injection and 100,000 MMBtu/d of firm withdrawal capacity. LGS said it will file an application for the expansion with the California Public Utility Commission (CPUC) in early July. The capacity expansion is anticipated to be placed in service the third quarter of 2006. All services will be performed under Lodi's CPUC Tariff Schedule FSS.

LGS said the expansion service will be offered at approximately four-cycles per year capability, however, the natural gas storage services may be customized to each customer; allowing bidders to request higher or lower rates of injection or withdrawal according to their individual requirements. The open season began May 26 and will continue until June 20.

Located approximately 75 miles east of San Francisco, near the city of Lodi, CA, the storage facility currently provides the California marketplace with 17 Bcf of firm inventory capacity with 450 MMcf/d of firm injection and 500 MMcf/d of firm withdrawal capacity.

LGS said it is soliciting bids for leases of natural gas storage space under the following conditions:

LGS will evaluate the bids for storage service based on the inventory demand rate and not on the net present value of the contract. In the event multiple bids have the same inventory demand rate; the bid with the longer term will prevail. In the event of two or more equal bids, LGS will award the capacity to the bid submitted first.

Responses to this offering are due in the LGS Houston office no later than 3:00 PM Central time June 20. For more information, contact Bob Hall at 281-679-3595 or at bhall@westernhubs.com. LGS said it will notify the successful bidder by close of business June 30.

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