Central New York Oil and Gas Co. LLC (CNYOG), an Inergy LP subsidiary, closed the nonbinding open season for the Stagecoach Phase II expansion, reporting a "strong response." Interest expressed exceeded 200% of the available field inventory capacity of 13 Bcf and 300% of available deliverability. Those expressing interest included local distribution companies, gas-fired generators and third-party marketers, many of whom do not participate in the existing storage field, CNYOG said.
The Phase II expansion of the existing 13.6 Bcf facility in Tioga County, NY will include 12 miles of storage lateral and interconnect facilities, called the Stagecoach North Lateral, for a connection to the proposed Millennium Pipeline. Interested parties will be able to contract for storage injection and withdrawal services with receipt and delivery points to either the Tennessee Gas Pipeline Co. (TGP) 300 Line and/or Millennium. The existing Stagecoach storage facility is connected to TGP. Significant interest also was shown in hub services among Stagecoach, TGP's 300 Line and Millennium. The company intends to provide hub services under its Phase II application at FERC. The open season began Nov. 21 (see NGI, Nov. 21).
"The strong response to this open season represents the market's desire to see more gas storage constructed in the northeast marketplace," said John Sherman, Inergy president and CEO. "The level of interest in hub services also suggests the need for greater diversity, flexibility and reliability of natural gas supplies."
CNYOG anticipates negotiating binding precedent agreements with several parties over the next two months. After certificate approval, Inergy plans to begin construction of the expanded facility with full commercial operation planned for the fourth quarter of 2007. Application to the Federal Energy Regulatory Commission is expected in February 2006 and will include the final project and service design. Storage service rates will be market-based.
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