FERC Tuesday approved PetroLogistics Natural Gas Storage LLC's proposal to expand the capacity of its existing storage facility in southern Louisiana by approximately 65%.

The PetroLogistics Olefins subsidiary wants to increase the capacity of its Choctaw Hub storage facility by 15.6 Bcf to 39.3 Bcf by acquiring and operating a third storage cavern. The company's existing two caverns have a capacity of 23.7 Bcf.

As part of the project, the Baton Rouge, LA-based company plans to construct one 12,000 hp electric-driven compressor unit and one 15,000 hp electric-driven compressor unit at its existing compressor station, which would increase total station compression to 47,000 hp. PetroLogistics said the additional compression would allow it to raise its maximum daily injection rate to 1.35 Bcf/d from 350 MMcf/d and the daily withdrawal rate to 1.6 Bcf/d from 450 MMcf/d.

The company also proposes to build a 13-mile, 30-inch diameter pipeline header that would parallel its existing pipeline header, with interconnections with Florida Gas Transmission, CrossTex LIG Pipeline Co., Bridgeline Pipeline System and Southern Natural Gas Co. In addition, the project calls for taps to be installed on the expansion header to accommodate planned future interconnects with Gulf South Pipeline Co., Cypress Pipeline Co. and Enterprise Products Partners' Acadian Gas System.

PetroLogistics proposes to build a 0.9-mile, 20-inch diameter line to connect the expansion head to an existing interconnect with Texas Eastern Transmission Co. LLC.

In an open season held in August 2010, the company told the Federal Energy Regulatory Commission it had received bids equal to or in excess of the project's proposed capacity.

The Commission approved PetroLogistics' request for continued authority to charge market-based rates for its proposed storage services.

"We conclude that numerous storage alternatives to PetroLogistics' proposed services exist in the relevant market that will prevent the exercise of market power. The HHI [Herfindahl-Hirschman Index] for working gas capacity and deliverability in the Gulf Coast Market are 548 and 531, respectively, well below the 1,800 HHI threshold level the Commission uses to determine the presence of market power," the order said [CP11-50].

©Copyright 2012 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.