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Open Season Begins for Proposed California Hub Storage

Tricor Ten Section Hub LLC launched a nonbinding open season Monday for its planned California underground natural gas storage and hub facility in southern Kern County 10 miles southwest of Bakersfield, within easy access of the Kern River and Mojave interstate pipelines. The open season will run through Sept. 30, targeting a 2012 commercial start for the facility, Tricor said.

Depending on the results from the open season, Tricor said it could consider offering storage service to intrastate pipeline customers, too, by connecting its facility to the Pacific Gas and Electric Co. (PG&E) and Southern California Gas Co. (SoCalGas) transmission pipeline systems.

Tricor sees the proposed enhanced storage facility as "strategically located" because of its location in the south-central part of California in proximity to the Kern and Mojave pipelines and the PG&E and SoCalGas lines, which are connected to three other interstate pipelines at the California border (north and south).

Tricor said it plans to file "shortly" a Section 7(c) application with the Federal Energy Regulatory Commission (FERC), and it plans to initially interconnect with Kern and Mojave, which are located about 21 miles southwest of the storage field, a large old oil and gas field covering 10 sections of land south of Bakersfield.

Nonbinding expressions of interest can be offer in one of two ways, Tricor said: (1) market-based rates covering firm storage service and interruptible storage service, including hub services such as wheeling, parking and loaning," and (2) an option offering firm storage service at "fixed charge(s) for a four-cycle/year service" with the fixed charges based upon what Tricor called a comparable firm storage service offered by other storage providers in its service area.

Envisioned at the storage site is a facility with 32.5 Bcf of capacity, 22.4 Bcf of which will be working gas. Tricor plans to drill 24 new horizontal wells, rework seven vertical wells and add 42,000 hp of compression. Ultimately, the plans are to provide four cycles annually with a maximum withdrawal of 1 Bcf/d and a maximum injection of 800 MMcf/d.

If it can gain a FERC certificate by February next year, Tricor hopes to have the facility operating in January 2012.

PG&E and SoCalGas owned and operated Ten Section for five years (1977-82) when they were pursuing a joint venture liquefied natural gas (LNG) project that ultimately was abandoned in the mid-1980s. The field was originally discovered in 1936 by Shell Oil, which operated it for 41 years until the sale to the two major California gas distribution utilities. The two utilities eventually sold Ten Section to MacFarland Energy for oil and gas production, and in 1997 the field was bought by Tricor for underground gas storage.

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