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New Storage, Pipe Facilities Revving Up for Heating Season

With the start of the 2008-2009 winter heating season less than a week away, new storage and pipelines facilities are revving up to serve markets in the Northeast, Pacific Northwest, Southeast and South. The Federal Energy Regulatory Commission has given the go-ahead to place in service a pipeline expansion in Florida, storage-related pipeline facilities in Louisiana and a storage withdrawal expansion in the Pacific Northwest, and is mulling over requests for a Nov. 1 start-up of a new storage cavern along the Gulf Coast and pipeline expansion facilities to serve the Long Island and New York markets.

The Commission gave Bobcat Gas Storage the green light to place into service pipeline facilities that will connect its salt dome natural gas storage project in St. Landry Parish, LA, to the interstate pipeline grid (see NGI, Oct. 13). Bobcat's pipeline facilities include the North Pipeline Corridor interconnecting with the Transcontinental Gas Pipe and Texas Eastern Transmission systems; the South Pipeline Corridor interconnecting with the ANR Pipeline, Florida Gas Transmission and Gulf South Pipeline systems; the Southwest Corridor interconnecting with the ANR system; the West Corridor interconnecting with the Gulf South Pipeline system; and all associated metering and interconnected facilities [CP06-66].

In early October Sugar Land, TX-based Bobcat asked FERC for permission to place one of its storage caverns in service by Nov. 1, contingent on its receiving authorization from the Louisiana Department of Natural Resources to begin debrining the cavern, but the Commission has yet to respond. The storage firm renewed its request last week.

"Bobcat is proceeding with cavern solution mining and expects to have solution mined 6 Bcf of total storage capacity in Cavern No. 1 in time to provide storage service by no later than Nov. 1. Bobcat plans on expanding Cavern No. 1 to its full 7.8 Bcf certificated capacity in the near term using a solution mining under gas (SMUG) process. Bobcat will inform the Commission when it has completed the SMUG process," the storage company said in its original request on Oct. 9.

Bobcat currently is leaching "Cavern No. 2 and expects to have leached enough cavern space to provide storage service on Cavern No. 2 by no later than Nov. 1, 2009." The second cavern also is expected to have working gas capacity of 7.8 Bcf. Bobcat said as many as five caverns could be located at the facility site.

The high-deliverability project is sited near Eunice, LA, and the Henry Hub, two of the top trading centers in the Gulf Coast region (see NGI, Dec. 19, 2005). The storage facility is being developed by Port Barre Investments LLC and its financial sponsor, Haddington Energy Partners III LLC, a private equity fund that provides capital to develop energy infrastructure with a focus on gas storage, gathering and processing.

In the Pacific Northeast, the Commission Friday approved Puget Sound Energy's request to start up its project, which increases the withdrawal deliverability capacity of the storage facility in which the utility is part owner by 300 MMcf/d. The project bolsters the withdrawal capability of the existing Jackson Prairie Storage facility in Lewis County, WA, to 1,150 MMcf/d from 850 MMcf/d [CP06-412].

The storage facility is jointly owned by Bellevue, WA-based Puget Sound, Northwest Pipeline and Avista Corp., a Spokane, WA-based electric and gas utility. Jackson Prairie is connected only to Northwest's system, which serves the two utilities.

For the high-growth Florida market, FERC last Wednesday gave Gulfstream Natural Gas System LLC the go-ahead to place into service a pipeline expansion to supply natural gas to a power plant that is being converted to gas.

The Phase IV pipeline facilities include 17.74 miles of 20-inch diameter offshore line that extends from an underwater hot tap with Gulfstream's existing 36-inch diameter line in the Hillsborough County waters of Tampa Bay to Florida Power Corp.'s Bartow power plant in Pinellas County, FL. The Bartow plant has operated as an oil-fired power plant [CP06-66]. Florida Power is in the process of repowering the facility as a gas-fired plant and increasing its capacity to 1,159 MW by adding combined-cycle gas turbines.

Gulfstream, which is owned by Williams and Spectra Energy, also plans to add a 15,000 hp compressor unit at its existing Station 410 in Coden, AL, and two 15,000 hp units at its existing Station 420 in Manatee County, FL. FERC, however, did not give Gulfstream the go-ahead to operate the compression facilities yet.

Florida Power affiliate Progress Energy Florida Inc. has subscribed to the entire 155,000 Dth/d of capacity of the project under 23-year term agreements. The proposed compression units are expected to be in service by Jan. 1, when Florida Power's Bartow plant begins full operation.

Looking to the northern markets, Iroquois Gas Transmission System LP's last Tuesday urged FERC to issue an order on an expedited basis allowing it to start up phase one of its expansion to provide increased gas supplies to Long Island and New York City.

The pipeline is seeking authorization from the Commission to begin operating phase one of the so-called 08/09 Expansion Project (the 36-inch diameter Newtown Loop segment in Newtown, CT) on Nov. 1, the start of the 2008-2009 winter heating season.

"The contract that Iroquois has with KeySpan Gas East Corp., the firm transportation customer being served by the 08/09 Expansion Project, calls for the Newtown Loop (the Phase I facilities) to be in service by Nov. 1. Further, Algonquin Gas Transmission LLC , the upstream shipper, has recently filed to place facilities it is constructing to serve KeySpan into service on Nov. 1." Iroquois called on FERC to approve its request by Wednesday (Oct. 29).

With these facilities, Iroquois would act as a middleman between Algonquin and KeySpan. Algonquin has entered into a precedent agreement with KeySpan to deliver 175,000 Dth/d of firm natural gas service effective Nov. 1 and an additional 25,000 Dth/d commencing Nov. 1, 2009. The volumes would be delivered by Algonquin to Iroquois at Brookfield, CT, for subsequent delivery by Iroquois to KeySpan to serve the New York City and Long Island markets, Iroquois said [CP07-457].

Because pressure in the Iroquois mainline prior to the expansion was substantially higher than the pressure in the Algonquin pipeline at Brookfield, Iroquois was able to only deliver gas into, but not receive gas from, the Algonquin system. The proposed expansion will allow Iroquois to receive gas from Algonquin.

The Iroquois expansion includes two other phases -- construction of two 10,300 hp compressor units at a new compressor station in Milford, CT, by Jan. 1, 2009 (Phase 2); and the addition of a 10,300 hp compressor unit to Iroquois' Brookfield Compressor Station in Brookfield by Nov. 1, 2009 (Phase 3).

FERC also has moved two Mississippi storage further along the certificate process by issuing favorable environmental assessments (EA) to SG Resources Mississippi LLC and El Paso-affiliated Southeast Gas Storage LLC.

SG Resources proposes to further expand the working gas capacity of its high-deliverability salt dome natural gas storage facility in Greene County, MS, by approximately 16 Bcf, bringing total working gas capacity to about 40 Bcf when its "Expansion Project II" facilities are completed [CP02-229].

The Spring, TX-based company is seeking to raise the capacity of each of its three FERC-approved caverns to 10 Bcf from 8 Bcf and develop a fourth 12.8 Bcf cavern, as well as construct a 24-inch diameter pipeline loop of the existing Destin Lateral, an interconnect pipeline that will connect the Destin Lateral loop to the Destin Pipeline and Southeast Supply Header meter stations and add two 8,000 hp compressors.

In April SG Resources Mississippi, a subsidiary of Houston-based SGR Holdings LLC, got the green light from FERC to place into service the first of the three caverns at the Southern Pines Energy Center (see NGI, April 21). The company said it expects to bring a second cavern into service in April 2009, with a third due to become operational in the second quarter of 2010. It noted that it has the capability to develop a fifth cavern in the future, raising its potential working gas capacity to 50 Bcf.

When the three caverns are operational, Southern Pines will it have 30 Bcf of storage space and will be capable of supporting gas withdrawal rates of up to 3 Bcf/d and injection rates of up to 1.5 Bcf/d to provide high-deliverability peaking and balancing services to markets in the Gulf Coast, Southeast and Northeast regions, SG Resources said.

Separately, Southeast Gas Storage got an environmental nod for its proposal to build a multi-cycle, high-deliverability storage facility that would provide 24.7 Bcf of working gas capacity from a natural gas reservoir in northeastern Mississippi [CP08-418].

Southeast Gas Storage, a new entrant to the storage field and affiliate of El Paso Corp., proposes to build a 24,000 hp Hamilton Compressor Station; a Hamilton meter station and interconnect; five miles of 24-inch diameter lateral pipeline that would tie into affiliate Tennessee Gas Pipeline's 500 Leg mainline system; 24-inch diameter gathering pipelines that would connect wells to the compressor station; salt water disposal piping; 15 new horizontal withdrawal/injection wells and well pads; convert active wells to observation wells; and associated facilities.

With 24.7 Bcf of working capacity, the facility would be capable of maximum injection rates of up to 450 MMcf/d and maximum withdrawal rates of up to 500 MMcf/d, according to the company. Southeast Gas has asked the Commission to approve the storage project by Dec. 31 so it may place the facilities into service by June 1, 2010.

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