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California Storage Project Moving Ahead

California Storage Project Moving Ahead

California regulators have taken steps to smooth the way for the state's first merchant underground natural gas storage field, the first wells for which are being drilled beginning this week about 50 miles north of Sacramento in a depleted dry gas field in rural northern California.

Wild Goose Storage is drilling four initial wells - one vertical and three horizontal - and is on target to begin operations in April of next year, according to Paul Amirault, vice president of business development for the facility's owner, Alberta Energy Co. in western Canada. He said the project has all of its required regulatory and environmental permits.

The administrative clean-up issues dealt with by the California Public Utilities Commission June 18 involved whether the market-based storage field should be required to have a cost-based minimum rate and pay the costs of future upgrades of Pacific Gas and Electric's transmission pipeline facilities connected to the storage field.

In both cases there were no additional requirements placed on the state's first nonutility storage field, Amirault said. Wild Goose will file a minimum rate only as a formality, and it will not be closely examined by regulators, Amirault said. The issue of who pays for upgrades will be worked out in the future, if facility expansion is required.

For now, both PG&ampE and Wild Goose agree there is ample capacity on PG&ampE's transmission pipeline (Line 167) that will be connected to the storage field by a four-mile pipeline built by the storage field backers. Wild Goose expects initially to offer 14 Bcf of inventory capacity, with firm withdrawal capability of 200 MMcf/d and injection capability of 80 MMcf/d.

Richard Nemec, Los Angeles

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