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Commission Denies Application for Texas Storage Project

FERC Thursday rejected the application of Turtle Bayou Gas Storage Co. LLC to build a salt dome gas storage facility and associated pipeline facilities northeast of Houston, TX.

"While we recognize that there is a need for additional natural gas storage in the U.S., Turtle Bayou has failed to provide any basis for a finding that any of this need would be filled by the storage capacity that Turtle Bayou proposes to develop, on property, it does not own. Therefore, we cannot find that Turtle Bayou's proposed project is required by the public convenience and necessity, and we deny its request for certificate authority to construct and operate its project," said the order issued by the Federal Energy Regulatory Commission [CP10-481].

In addition to failing to show a need for the project, "we find that the proposed project will have a significant impact on Mineral Interest's property rights," which are owned by Kathryn Kyle, individually and as executor of the estate of W.W. Kyle II, deceased; and Brudge Klye Hopkins (collectively, Mineral Interest), the FERC order noted.

"Mineral Interest owns the oil, gas and other minerals in, on, and under the property within which Turtle Bayou proposes to construct...As things stand now, Turtle Bayou would need to use eminent domain to acquire all of the surface mineral rights necessary for its storage project to go forward. Therefore, we find that approval of the proposed project could have substantial adverse impact on Mineral Interest," it said.

Mineral Interest said Turtle Bayou has failed to take any steps to obtain the necessary property and mineral rights for the storage project. Moreover, Moss Bluff Hub LLC, which owns and operates a gas storage facility adjacent to the proposed Turtle Bayou project, expressed opposition to the project.

Turtle Bayou proposed to construct the two-cavern, 12 Bcf storage facility in Chambers and Liberty counties, about 40 miles from Houston, as well as pipeline facilities that would extend from the storage facility to Natural Gas Pipeline Co. of America and Texas Eastern Transmission. The storage project would be capable of injecting gas at a maximum rate of up to 300 MMcf/d and withdrawing gas at a maximum rate of 600 MMcf/d, with the capability of cycling the capacity six times per year, according to the company.

Turtle Bayou is a new company that does not own any existing storage facilities. It is 100% owned by The Cornelia Lacey Wright Testamentary Trust, ASTO Overbrook Land LLC, The Pittman Charitable Trust, Entrust Administration of the Southeast FBO James Standridge IRA, and Entrust Administration of the Southeast FBO Vaughn P. Stough IRA.

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