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Illinois Aquifer Storage Capability Expansion Approved

August 18, 2008
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FERC has approved a project to increase storage capability at the Hersher Galesville (HG) aquifer storage field in Kankakee County, IL, proposed by Natural Gas Pipeline Co. of America.

Natural intends to add 10 Bcf of incremental firm storage service by increasing water removal capability at the aquifer and adding 2 Bcf of base gas. The project also includes increasing peak day withdrawal at HG from 1 Bcf to 1.1 Bcf. Natural is not proposing to increase capacity at the field; rather, the company intends to increase the gas storage capabilities of the aquifer.

"...HG is not operated at its maximum certificated capacity in order to prevent storage gas from migrating," the Federal Energy Regulatory Commission (FERC) order says. "Thus, Natural asserts the reservoir currently is capable of holding only 37.5 Bcf of gas, including 13.35 Bcf working gas and 24.15 Bcf of cushion gas.

"The proposed project will increase the storage capability of the HG reservoir by 12.0 Bcf, from 37.5 Bcf to 49.5 Bcf, including the additional 2.0 Bcf of cushion gas that Natural proposes to purchase and inject."

The order notes that HG's cushion or base gas currently amounts to 64% of the field's total capacity as aquifer storage typically requires cushion gas to be 50-80% of total field capacity. In order to increase the facility's capability, Natural plans to:

Total cost of the project is estimated at nearly $75.5 million, with $60.8 million attributable to the expansion of storage capability and $14.5 million for the excess compression, which is proposed as a redundancy to existing compression whose age is making it difficult to maintain.

"Natural states that the additional proposed compression will increase overall system reliability and result in an overall cost saving since the installation of one larger compressor unit is more effective than the installation of separate expansion compression units to support the expansion services and to increase reliability of service for existing customers," the order notes.

According to the order, Natural used the $60.8 million figure for calculating its proposed incremental rate for services using the incremental capacity. "Therefore, Natural proposes to charge an incremental rate of $6.8750/Dth per month, based on a cost of service of $11.2 million and a rate design volume of 136,000 Dth/d," the order says. "Natural further proposes a $0.2260/Dth authorized overrun service charge and to recover fuel by assessing the incremental shippers the current Rate Schedule NSS fuel factor of 1.7%."

The Commission found that the project will not have adverse effects on the quality of Natural's service to existing customers nor other pipelines and their customers. "Natural has demonstrated that there is a need for additional storage capacity to provide service, the rate treatment will not result in subsidization of the project by existing shippers, and no other pipelines, their captive customers or landowners will be adversely affected."

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ISSN © 2577-9877 | ISSN © 1532-1266
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