Falcon Gas Storage Contracts To Serve TX Power Plant

Duke Energy Trading and Marketing LLC has signed a contract to receive load following and load balancing services from Houston-based Falcon Gas Storage Co. Inc. for the 245 MW Encogen Power Plant located near Abilene, TX. Duke is the fuel manager for the plant, which will be served by Falcon's Hill-Lake gas storage facility in Eastland County, TX.

Falcon began providing natural gas load following services for the Texas facility in August to match the plant's peak hourly natural gas needs with its power output profile. Operations at the Encogen plant were revamped recently to supply peaking electric power on the TXU Electric system.

"We anticipate that we will see a greater requirement for these intra-day load balancing services as more of the planned gas-fired power projects in Texas come on line over the next few years," said Jeff Foutch, executive vice president of Falcon Gas Storage. "The intrastate pipelines have traditionally required that gas supplies be transported in equal hourly quantities throughout the day, but the electric power demands on the power generation plants require that they burn gas on a non-ratable basis. Therefore, high deliverability, multi-cycle gas storage is needed to balance the difference."

The Hill-Lake natural gas storage facility is located about 100 miles west of Dallas/Fort Worth in Eastland County. Falcon purchased rights to the plant from TXU Lone Star Pipeline earlier this year and announced plans to convert the storage plant from a single-cycle facility, serving the Abilene market during the winter heating season, to a high-deliverability operation attached to the Texas gas pipeline grid. Falcon plans to add compression, retrofit surface facilities and drill horizontal injection/withdrawal wells in order to convert the Hill-Lake facility into a multi-cycle storage plant capable of four to six annual inventory cycles, with peak withdrawal capacity in excess of 300,000 MMBu/d.

In addition, Falcon said it plans to construct a 16-mile, 20-inch diameter high-pressure pipeline to TXU Lone Star Pipeline Co.'s "X" line and the North Texas Pipeline jointly owned by TXU Fuels and El Paso Natural Gas. The latter two 36-inch diameter gas transmission pipelines traverse the emerging energy corridor that runs from the Waha Hub in West Texas to the Carthage Hub in East Texas.

Falcon has developed several high deliverability, multi-cycle gas storage facilities in Texas and the Northeast to provide intra-day balancing services to the electric generation industry. It is the largest independent owner and operator of high deliverability, multi-cycle natural gas storage capacity in the Southwest. Falcon now has more than 20 Bcf of working gas storage capacity with in excess of 600,000 Mcf/d of peak-day deliverability, as well as six additional gas storage projects in various stages of development in Texas, New York and the Rocky Mountains.

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