FERC has given ANR Pipeline the green light to develop, construct and operate an underground natural gas storage field and associated facilities in Michigan, and to acquire a partial interest in pipeline lateral facilities owned by affiliate ANR Storage Co.

ANR Pipeline proposes to acquire from ANR Storage all of the storage, minerals and surface rights within the Cold Springs 1 storage field located in Kalkaska County, MI. ANR Storage purchased the 810-acre field and produced natural gas from it between 2004 and 2006, but never developed or operated the reservoir as a jurisdictional storage facility.

ANR Pipeline plans to construct new facilities to convert the depleted reservoir to storage services. The project calls for the pipeline to drill six new injection/withdrawal wells, convert No. 1-6 State Blue Lake well from a production well to an observation well, build a compression station consisting of one 7,000-horsepower electric-driven reciprocating compressor, and construct new piping. The estimated cost of the facilities will be $77.4 million, according to ANR Pipeline [CP06-463].

It said the initial working gas capacity of the Cold Springs 1 field will be approximately 14 Bcf. The field will provide a peak deliverability of 200 MMcf/d, the pipeline noted. ANR Pipeline currently owns four natural gas storage reservoirs and leases five others in Michigan. The combined working gas capacity of these fields is 116.8 Bcf. It also holds approximately 75 Bcf of contract storage with two affiliates.

In addition, the Federal Energy Regulatory Commission approved ANR Storage's request to sell to ANR Pipeline a 40% interest in the 2.4-mile, 24-inch diameter Cold Springs lateral in Kalkaska County.

As a result of a binding open season held in early 2006, ANR Pipeline said it has executed binding precedent agreements for firm storage service and firm transportation service with seven companies, including Southwest Energy LP, Chevron U.S.A. Inc., Nexen Marketing USA Inc., ConocoPhillips, CIMA Energy Ltd., Oneok Energy Services Co. and Wisconsin Power & Light.

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