AGL Resources' Golden Triangle Storage Inc. received a FERC certificate Dec. 31 for its proposed underground gas storage project as well as for market-based rates for the services it will provide. The project is located in the Spindletop salt dome on the southern edge of Beaumont in Jefferson County, TX.

The company plans to initially offer up to 12 Bcf of working storage capacity in two caverns and, depending on market demand, could gradually enlarge the two caverns' capacity to up to 16 Bcf of working capacity. Approximately one-third of the initial capacity of the first cavern is under contract for firm services. Golden Triangle also will build a nearly nine-mile pipeline heading northeast from the storage site into Orange County to connect the facility with three interstate and three intrastate pipelines.

"We have seen tremendous market interest in the project," said Dana Grams, president of Pivotal Energy Development, the division of AGL Resources overseeing the project. "During our open season [see NGI, May 7, 2007] we received bids for approximately three and a half times the 6 Bcf working gas capacity of the first cavern. More storage in the area is critical given the increasing importance of the Beaumont region as an energy crossroad where new natural gas supplies, including LNG [liquefied natural gas] imports, meet the nation's pipeline network that delivers gas to market."

Initial commercial operations are slated to begin in late 2010 to early 2011, with the second cavern coming on-line in 2013. The company is in the process of securing additional permits to begin construction in March or April. It has placed orders for long-lead time equipment and has issued proposal requests to contractors for initial phase construction services.

The timetable has been moved back somewhat from what was outlined in the first half of December when Golden Triangle received environmental clearance for the project from the Federal Energy Regulatory Commission (see NGI, Dec. 17, 2007). The project was announced in December 2006 (see NGI, Dec. 11, 2006). Golden Triangle filed for its FERC certificate last year (see NGI, July 9, 2007).

©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.