After Almost a Decade, Copiah Storage Project is a Go

To better suit the growing demand for natural gas at a moment's notice for gas-fired electricity generating plants, Duke Energy reported it is finally planning to convert an underground salt dome in Copiah County, MS, into a natural gas storage facility with 3 Bcf of initial storage capacity. The dome could be expanded by an additional 6 Bcf at a later date, the company said.

The proposed facility, which could be brought online as early as spring 2004, would provide rapid response fuel storage services for delivery into nearby pipeline systems, which Duke said it expects will appeal to gas-fueled power plants. Copiah, formerly called MS-1, has been on the drawing board since the early 1990s (see NGI, April 2). After several ownership changes and years of consideration, Market Hub Partners (MHP), now a Duke Energy Gas Transmission unit (DEGT), seems poised to see the project through.

"With demand for electricity escalating in the United States, natural gas will be the fuel of choice for power generation," said Gregory Rizzo, vice president of marketing for DEGT and president of MHP. "The high deliverability of salt cavern storage makes the services provided especially appealing to generating stations that often require natural gas be withdrawn at a moment's notice to help them bring a unit or units on line quickly to meet demand."

DEGT/MHP expects to file an application this fall with the Federal Energy Regulatory Commission (FERC) to develop the cavern or caverns, construct the related on-site equipment and build any pipeline interconnects that are necessary to deliver gas into existing pipeline infrastructure in the area. Duke said related research and surveying necessary for the application would also begin immediately.

Because of the salt cavern's location, the company said it is still debating interconnection options to maximize the storage services offered from the Copiah project. Because Copiah County is nestled in the southwest corner of the state, the project has numerous options for pipeline interconnections, including Gulf South, Sonat, Transco and Duke's own Texas Eastern Transmission.

The Copiah salt cavern received its first green light after a completed open season that showed strong interest. DEGT/MHP said the commitment to proceed with the final development of the project will be made after all of the state and federal regulations have been satisfied.

"Salt cavern storage also can cycle quickly, meaning the operator can change from injection of natural gas to withdrawal and back in a matter of minutes," Rizzo said. "That's an important benefit to those desiring salt cavern storage services not available with traditional, depleted, reservoir storage of natural gas."

Through DEGT's $400 million acquisition of Market Hub Partners in 2000, it has become the largest owner of salt cavern storage facilities in the country, with a total storage capacity of 24 Bcf at caverns in Texas and Louisiana. DEGT/MHP said a salt dome site in Tioga County, PA, which the company has already begun work on, is still being considered for development.

MHP completed the first of 10 cavern wells on the Tioga Gas Storage project in June 2000 (see NGI, June 26, 2000). The Tioga project was due to begin commercial service in late 2002 or early 2003 and reach 5 Bcf of working capacity and 500 MMcf/d of deliverability by 2004, but MHP was delayed. The company had to submit a "lessons learned" plan to FERC after the first well was completed. The plan to move ahead received approval in January of this year.

"We are in negotiations on moving ahead with that project," said David Nightingale, Duke Energy's general manager of storage services. "That project has been controversial with some of the other storage companies up in the area, CNG in particular, so we have been negotiating with CNG trying to come to some settlements before we move ahead with the project."

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