FERC Wednesday rejected Enstor Gulf Storage LLC's application to operate a "virtual" Gulf Coast storage facility, saying that the company's proposal was "deficient."

"Enstor's application is deficient because it does not contain the correct information and exhibits required in Part 157 of the Commission regulations. Without a full explanation of its proposal and revised exhibits that conform to its proposal...the applicant has not provided the Commission with adequate information to determine if its application is in the public convenience and necessity," the order said [CP07-94]. FERC left open the door for Enstor Gulf, an affiliate of Houston-based Enstor Operating Co. LLC, to file a "fully supported" proposal at a later date.

In its application filed in March, Enstor Gulf proposed to operate a "Gulf Coast Storage Pool" that would offer an "enhanced" range of storage and storage-related services to serve markets in the Midwest, Atlantic Seaboard, New England and Southwest regions (see Daily GPI, March 14). Rather than building an actual facility, it said it would acquire storage capacity from affiliated and nonaffiliated providers to offer in the interstate market.

The Gulf Coast storage pool would use 10 Bcf of capacity to be acquired from the Katy Storage and Hub facility, a stand-alone storage facility owned and operated by affiliate Enstor Katy Storage and Transportation LP in southeastern Texas; 10 Bcf of Gulf Coast firm capacity from Natural Gas Pipeline Company of America (NGPL); and 10 Bcf of working gas storage capacity acquired from third parties in the Gulf Coast market area. Enstor said it already has entered into agreements for storage capacity with Katy Storage and NGPL.

Enstor Gulf said the planned storage capacity would be geographically contained within FERC-authorized interstate natural gas pipeline pools, or subpools. The pool ultimately would operate with up to 30 Bcf of working gas capacity and 1.2 Bcf/d of associated injection and deliverability capability, a level of injection and deliverability capacity that is currently not offered by any other gas storage provider, or even physically available on the Gulf Coast, the company said.

When the Gulf Coast storage pool is operational, Enstor Gulf said customers would be able to choose among several interstate subpools within which to deliver and receive storage gas. The interstate pipelines operating in the storage pool areas would include NGPL, Transcontinental Gas Pipe Line, Trunkline Gas, Tennessee Gas Pipeline and Gulf South Pipeline.

In mid-May, Enstor responded to FERC staff questions about the company's proposal. "Several of Enstor's responses make significant changes to Enstor's original proposal regarding available receipt and delivery points, the definition of a subpool and restrictions on the use of a subpool," which raised concerns at FERC, the agency staff said.

Enstor Operating currently owns and operates 50 Bcf of storage capacity in North America at the Alberta Hub Storage facility near Edmonton, AB; the Grama Ridge Storage facility in Lea County, NM; and the Katy Storage facility in Katy, TX. It also has two sites under development -- Houston Hub Storage facility near Houston and Waha Storage in western Texas.

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