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FERC Gives Green Light to Colorado's First Bedded Salt Gas Storage Project

FERC has issued a certificate for construction of the Unocal Windy Hill bedded salt gas storage facility, which will be constructed in two phases in Morgan County, CO, and connected to the Cheyenne Plains, Colorado Interstate Gas and Public Service Company of Colorado pipeline systems. When fully completed the storage field will provide 6 Bcf of working gas capacity and 400 MMcf/d of deliverability under market-based rates (see NGI, Nov. 14, 2005).

The Chevron subsidiary intends to construct the facility in two phases, leeching four caverns in salt beds about 6,000 feet below the ground surface near the city of Brush, CO. Each of the caverns will hold 2.39 Bcf of gas, including 1.5 Bcf of working gas. The completed facility will be designed to cycle up to six times per year with a peak injection rate of 135 MMcf/d. Its initial withdrawal rate from two caverns will be 200 MMcf/d in 2008 with the third and fourth caverns added two years later. Three gas-fired compression units, each with 2,370 horsepower, will be installed.

The storage facility will be the first bedded salt gas storage facility in Colorado and the ninth storage field in the state. Currently, there are eight storage facilities operating in Colorado, three of which are located in Morgan County, with a total working gas capacity of 40.62 Bcf.

The storage project was first announced by Unocal Windy Hill Gas Storage LLC in June of 2004. FERC granted Unocal Windy Hill's request to operate under market-based rate authority, concluding that there are good storage alternatives available in the relevant market and the the project lacks significant market power.

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