Wild Goose Storage Considers Tripling Capacity
Alberta Energy's Wild Goose Storage subsidiary in California is considering a major expansion that could nearly triple the size of its natural gas storage facility in Butte County, near Gridley, CA. The company has launched an open season for customer sign-ups that will run until May 22.
"With the dramatic natural gas price volatility that has occurred in California and with future power development expected to contribute to volatility for the next few years, people are recognizing the tremendous value of holding storage in this market area," said Richard Daniel, president of Wild Goose. Earlier this year, Wild Goose, the only independent storage facility in California, completed an open season that generated a strong response from both current and new customers.
"The requests were overwhelming. After prorating part of each storage request, we still sold out the current facility for the next four to five years," Daniel said. "With such a great demand, we're prepared to move ahead quickly to expand our existing facilities. This will help California's energy industry better manage natural gas demand in the future."
This second open season of 2001 is soliciting offers for longer-term (five years or more) storage contracts with service commencing no later than April 1, 2004. Depending upon response, Wild Goose is considering an expansion of working gas capacity from 14 Bcf to as much as 38 Bcf, with withdrawal capability rising from 200 MMcf/d to as much as 650 MMcf/d. The facility has been in operation for two years.
"Gas storage is no longer viewed strictly as a gas price arbitrage play, moving gas from low price periods to high price periods on the forward market. It is also seen as an economic way to improve supply security," Daniel said.
"Underground natural gas storage can play an important role in helping to mitigate energy price spikes," added Mark Roberge of Wild Goose. "Wild Goose can help relieve this price volatility."
Wild Goose plans to file an expansion application with the California Public Utilities Commission this spring, which would enable the new facilities to be online by no later than April 1, 2004. At the earliest, the new facilities could be in operation as early as spring 2003, it said..
Expansion plans include construction of approximately 25 miles of additional transmission facilities from Pacific Gas & Electric's main California pipeline to the Wild Goose storage facility, as well as increasing compression and drilling new wells at the storage facility itself.
"Adding infrastructure to our existing operations allows us to bring on new capacity at competitive rates. We have had numerous discussions with power generators, marketers, and industrial users of natural gas who have told us they'd be very interested in seeing another open season at Wild Goose," said Ben Ledene, vice president of market development for Wild Goose.
For more information on the open season, contact Ledene in Calgary at (403) 266-8192, Chris Price and Mark Baldwin with Interstate Gas Services in Livermore, CA, at (925) 243-0350, or Roberge in San Francisco (415) 291-0750.
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