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California Gas Storage Project Applies at FERC

Having launched a nonbinding open season in early June, the backers of the proposed Tricor Ten Section Hub LLC underground natural gas storage project in California filed an application with FERC Tuesday, seeking a certificate for their project by February. They seek to operate a high-deliverability, multi-cycle storage facility in Kern County, 10 miles southwest of Bakersfield.

Tricor launched its open season June 1, running through Sept. 30 and targeting a 2012 commercial start for the facility (see Daily GPI, June 2). 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 systems.

In its application to the Federal Energy Regulatory Commission, Tricor said its facility initially would interconnect with the jointly owned Kern River/Mojave interstate pipeline. It notes the longer-term potential for connecting with PG&E and SoCalGas pipelines.

Ultimately, the storage project could have what Tricor estimates to be a 4 Bcf "combined lateral surrounding optionality" at its storage hub.

The proposed facility's location has had a strategic importance in the southern end of California's agriculture and fossil fuel-rich central San Joaquin Valley. PG&E and SoCalGas once owned and operated Ten Section for five years (1977-1982) 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. Tricor has owned the field since 1997.

Ten Section hopes to offer the "flexibility" needed to attract and serve a diverse customer base with a "much-needed" gas facility for the West, said Chris Kunzi, Tricor vice president. "[The proposed storage field's] strategic location is central to the backbone systems of all major western interstate pipelines, and local intrastate pipelines and load centers. As a result, Ten Section's development at this hub will significantly improve the overall efficiency and effectiveness of the western interstate gas transportation network."

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