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Avista, PG&E GT Plan Gas Storage in Washington

Avista, PG&E GT Plan Gas Storage in Washington

The storage-poor Pacific Northwest could get some needed relief in the near future. Avista Corp. and PG&E Gas Transmission-Northwest (PG&E GT-NW) have joined forces to investigate building another underground natural gas storage facility in an aquifer in eastern Washington near the interconnection of PG&E GT-NW and Williams (Northwest Pipeline).

Avista's Patricia Grable said it was premature to speculate on what the ultimate deliverability or capacity of new project could be. But Avista Corp. CEO Tom Matthews said it could prove "of similar value [as Jackson Prairie] to our company in the future."

Avista is part owner with Williams of the Jackson Prairie underground storage facility in western Washington, which currently is undergoing an expansion to 18 Bcf working gas capacity from 15 Bcf and to 850 MMcf/d of deliverability from 550 MMcf/d. The only other storage facility in the region is Northwest Natural Gas's Mist (OR) facility 50 miles northwest of Portland. Mist also is rolling out the first part of an eight-year, $122 million expansion this year. The first phase will increase working gas capacity at Mist to 8.5 Bcf from only 6.5 Bcf and will raise deliverability to 125 MMcf/d from 80 MMcf/d.

New demand records set this winter in Northern California demonstrate the need for greater access to gas supply, according to PG&E GT-NW President Thomas B. King. Pacific Northwest gas demand growth, which has been averaging a strong 5%/year throughout most of the 1990s, isn't showing signs of letting up. "We are exploring various alternatives to best meet the need for additional natural gas supply in the Pacific Northwest, including both gas storage and new pipeline capacity," said King. "This current agreement will help us determine the economic viability of new storage development in areas accessible to both Northwest and California markets."

Avista and PG&E GT plan to begin drilling and geologic testing of the site during the second quarter. "The testing program will provide the additional information we need to determine whether it is in the economic interest of our company and its shareholders to continue to participate in the development of this site over the next three to four years," said Matthews.

PG&E GT and Avista also may face some additional storage competition in the region in the near future. Western Hub Properties LLC (WHP), which is developing the Lodi Gas Storage project near Lodi, CA, announced last fall that it too was searching for locations to develop up to four new high-deliverability gas storage hubs in the Pacific Northwest over the next five years. The company still has not announced any of those locations, however.

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