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MoBay Awards All 10 Bcf of South Alabama Storage

All 10 Bcf of firm storage service offered during a recently concluded open season by MoBay Storage Hub, an affiliate of Falcon Gas Storage Co. Inc., has been awarded, the company said last week.

A total of 12 bidders, including both new and existing customers, participated in the May 1 on-line auction, and more than 40 Bcf was bid for Phase I of the project, the company said. MoBay expects to execute binding precedent agreements with the winning bidders by May 15.

"Interest has been strong across the board from large producers, marketers, natural gas pipelines and utilities in both the Northeast and Southeast," said MoBay CEO Edmund Knolle. "The results of the open season reaffirm our view that the MoBay Storage Hub will fundamentally alter the eastern Gulf Coast region's natural gas dynamics. MoBay is uniquely positioned next to multiple interstate pipelines, well east of major pipeline bottlenecks."

The MoBay Storage Hub, located in south Alabama at the nexus of the Southeast natural gas pipeline system, would provide customers with direct access to more than 6 Bcf/d of pipeline capacity serving the eastern Gulf Coast, Southeast and Northeast markets. Direct interconnects with Florida Gas Transmission (Zone 3), Gulfstream Natural Gas, Gulf South Pipeline (Zone 4), Southeast Supply Header and Transcontinental Gas Pipe Line (Zone 4A) will be available. Other potential interconnects include Williams Field Services/Mobile Bay Gas Processing, DCP Midstream/DIGP, the Chevron Chandeleur Pipeline System and Mobile Gas Services pipeline. All planned and potential interconnects are within one mile of MoBay's main compressor station. MoBay is located less than 25 miles from the planned Gulf LNG Clean Energy Project in Pascagoula, MS.

Through direct connections with Gulfstream and the Southeast Supply Header, customers will be able to access Destin Pipeline, Southern Natural Gas Co., Columbia Gulf Transmission, CenterPoint Energy Gas Transmission, Texas Eastern Transmission and Tennessee Gas pipelines via backhaul. MoBay is the only storage facility with direct connections to the two main pipelines serving Florida.

Phase I of the project, scheduled for completion in October 2009, will provide 50 Bcf of high-deliverability, multi-cycle gas storage capacity with 1.0 Bcf/d of withdrawal and injection capacity.

The open season for Phase I storage service was announced by MoBay in March (see NGI, March 31). Binding precedent agreements had already have been executed with nine customers for 29.4 Bcf of MoBay's Phase I working gas capacity. MoBay signed a lease with the state of Alabama for gas storage reservoirs earlier this year (see NGI, Feb. 11).

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