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SG Resources Readies New Expansion at Southern Pines Storage

SG Resources Mississippi LLC won FERC approval last Thursday to further expand the working gas capacity of its high-deliverability salt dome natural gas storage facility in Greene County, MS, by 16 Bcf, bringing total working gas capacity to about 40 Bcf when the second expansion of its original project is completed.

The Spring, TX-based company proposes to raise the capacity of each of its three Federal Energy Regulatory Commission (FERC)-approved caverns to 10 Bcf from 8 Bcf and develop a fourth 12.8 Bcf cavern (of which 10 Bcf will be working gas), 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. The total combined capacity of the looped Destin Lateral facilities will be 1.2 Bcf/d.

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 already-approved caverns at its Southern Pines Energy Center. The company said it expects to bring a second cavern into service in April, 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.

When the expanded storage facilities are in operation, SG Resources said they will have the capability of withdrawing up up to 2.4 Bcf/d and injecting up to 1.2 Bcf/d, the FERC order said [CP02-229].

In Thursday's order amending SG Resources' original 2002 certificate, the Commission reaffirmed the company's market-based rate authority for its storage, hub and wheeling services (see NGI, Oct. 14, 2002).

FERC has approved for operation direct interconnects between Southern Pines and Destin Pipeline, Gulf South Pipeline, Florida Gas Transmission (FGT), Transcontinental Gas Pipe Line (Transco) and Southeast Supply Header System, which serve markets in the Southeast and Northeast. FGT's interconnection with the storage facility accommodates receipts and deliveries of up to 1 Bcf/d, while the Transco interconnection accommodates up to 600 MMcf/d.

In addition, the storage facility has indirect access to Southern Natural Gas, Gulf South Pipeline, Gulfstream Natural Gas System and Tennessee Gas Pipeline by way of Destin and another new interconnect with Gulfstream via the Mobile Bay Lateral, according to the company.

Houston-based SGR Holdings LLC, which develops, owns and operates high-deliverability storage caverns, owns a 60% interest in SG Resources Mississippi.

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