In its first move into California and the West, a unit of Naperville, IL-based Nicor Inc. gained state regulators' approval last Thursday for new underground storage project in the north central valley that will be linked to Pacific Gas and Electric Co.'s (PG&E) backbone transmission pipeline system. Construction is scheduled to begin in November this year.

With eight underground storage fields with a collective capacity of 150 Bcf in the northern Illinois region and a joint venture storage project in Louisiana, Nicor has a track record in the gas storage sector. It intends to begin operation of the Central Valley Gas Storage LLC facility by April 1, 2012, a spokesperson told NGI.

The California Public Utilities Commission (CPUC), as part of approving en masse several dozen items on its consent agenda, approved the construction and operation of the state's newest storage operation in Colusa County.

Central Valley will provide an 11 Bcf working gas reservoir with nine directional-drilled injection and withdrawal wells, along with 10,650 hp of compression and dehydration facilities. The project will also involve the building of a 14.7-mile, 24-inch diameter natural gas transmission line connected to the PG&E system.

"Central Valley plans to initiate construction activity in late November [this year], subject to receiving all of the requisite permits," the spokesperson said. Construction is slated for completion in the fourth quarter next year.

Noting the strategic location of the field, a depleted natural gas reservoir, Central Valley is promoting its new project as a high-deliverability, multi-turn facility. "The interconnection point will be considered a PG&E citygate point similar to other independent storage facilities connected to the PG&E system, and it will provide access to West Coast natural gas and power markets," the spokesperson said.

Central Valley President Steve Cittadine praised the geographic location and service profile of the project, saying they "offer an excellent complement to new infrastructure being developed to serve West Coast markets and will facilitate more effective use of natural gas as renewable energy mandates take shape in California."

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