Tricor Ten Section Hub LLC's proposed gas storage project near Bakersfield, CA, has received a favorable environmental review from FERC's Office of Energy Projects (OEP).

"...OEP staff has determined that if Tricor constructs and operates the facilities in accordance with the application and supplements and the staff's recommended mitigation measures, approval of the project would not constitute a major federal action significantly affecting the quality of the human environment," the Federal Energy Regulatory Commission assessment said.

The project would be located near the backbone of major western U.S. pipelines and would have more than 4 Bcf of interstate and intrastate pipeline capacity surrounding it. The facility could contain 22.4 Bcf of working gas, with 10.1 Bcf of base gas and would offer customers four-turn, high-speed deliverability. Ten Section Hub said it intends to offer 1 Bcf/d of withdrawal service and 0.8 Bcf/d of injection service.

The project held what backers deemed to be a successful open season earlier this year (see Daily GPI, Oct. 12).

The project is a good distance away from the shale gas rush. However, since it is at an intersection of western interstate and intrastate pipelines in a market area, it can still enjoy some volatility and the storage spreads that come with it, Tricor Managing Director Christopher Kunzi said at a Houston conference recently. The location would allow the project to take advantage of arbitrage opportunities "well beyond the base tariff revenue," and there are also "micro opportunities" presented by the forward curve, he said (see Daily GPI, Oct. 20).

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