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FERC Gives Egan Hub Two More Years to Complete Expansions

FERC last Wednesday approved another two-year extension of the deadline for Egan Hub Storage to complete and place into operation two coordinated expansions of its natural gas storage facility in Acadia Parish, LA.

The first extension was granted to Egan Hub in June 2004, and required the Duke Energy storage affiliate to complete the projects by next month. In a request filed in March, Egan Hub said that conditions following the Gulf Coast hurricanes last summer and fall require it to extend the construction schedule for at least a portion of its facility expansion. It further noted that several of the liquefied natural gas (LNG) terminals that it will serve won't be in service for another two years.

The storage company told FERC that demand for its storage services is stronger than ever. "As a result of the severe disruption in natural gas supplies caused by [the] hurricanes, there is a high level of interest in utilizing Egan Hub's salt dome storage capacity to address supply reliability concerns and manage risk. Demand for storage has also increased in response to the significant price volatility experienced in this region over the last several years."

The deadline extension applies to two FERC-approved projects. In a June 2001 order, which was amended a year later, FERC issued Egan Hub a certificate to raise the maximum aggregate operating capacity of its storage field to 21 Bcf, with a third cavern being limited to a capacity of 4.6 Bcf. In an April 2003 order, the Commission granted Egan Hub certificate authority to boost the capacity of the third cavern to 10.5 Bcf, raising the maximum aggregate operating capacity of its storage field to 31.5 Bcf.

The latest extension gives Egan Hub until June 14, 2008 to complete both expansions and put them in service. The initial expansion, which was approved in the June 2001 order, was to have been placed into operation in June 2004, while the second expansion was to have been put in service last month.

Duke Energy subsidiary Market Hub Partners (MHP) owns Egan Hub, which has 16 Bcf of existing storage capacity. MHP also owns and operates the Moss Bluff, TX salt dome, which has 16 Bcf of working gas capacity as well.

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