Larry Bickle, John Strom and Chris Jones, the three founders ofTPC Corp. (formerly Tejas Power Corp., which was sold to PacifiCorpin April of last year) haven’t lost sight of their goal ofdeveloping a large network of new high-deliverability storage hubs.But in contrast to TPC, Western Hub Properties LLC (WHP), their newcompany formed in April, plans to focus on the West rather thanbuilding projects in the eastern U.S.

WHP plans to develop up to five new high-deliverability gasstorage hubs in the Pacific and Pacific Northwest regions over thenext five years. The first project, Lodi Gas Storage, whichoriginally was the project of Northern California Gas Storage untilWHP purchased the company in June, is expected to begin operationsin October of next year, would provide storage and hub servicesnear Lodi, CA, 20 miles south of Sacramento. The facility wouldprovide service directly to Pacific Gas &amp Electric’s (PG&ampE)Line 401 near the Antioch Terminal in the heart of PG&ampE’smarket.

“The electric restructuring in California, with the gas-firedplants changing ownership outside the traditional utilitygenerator, is what we think will change the gas buying patternsthat will make the multiple-turn, high-deliverability storageextremely valuable,” said WHP President Tom Dill. “The seasonalstorage is great for seasonal demand swings. But thehigh-deliverability will handle within-the-week swings, and thatwill have value to the electric generators.”

With storage services from the highly permeable depleted Lodifield, WHP intends to offer customers six-cycle per year storageservice, similar to what is offered by Gulf Coast salt cavernstorage operations. The company expects the facility to have anaverage injection capacity of 200 MMcf/d and withdrawal capacity of200 MMcf/d with 6 Bcf of working gas capacity and the possibilityof a major expansion.

Dill said WHP intends to file an application for the projectthis month with the California Public Utilities Commission forintrastate storage service, but also intends to file with FERC toprovide some interstate service to customers in the PacificNorthwest until it can develop other new facilities farther north.

“Washington and Oregon have substantial growth in gas demand,and most of it is low-load factor growth, which is ideal for thetype of storage that we want to focus on. So in the eight-stateregion [of the Pacific Northwest] we’re intending, in addition toLodi, to do three to four more projects over the next five years.[It’s] aggressive but possible.” Dill would not disclose any otherlocations for the company’s planned storage hubs. He also would notdisclose the rates being offered for service at Lodi. The companyintends to file for market-based rates and plans to keep costsconfidential.

“We do not have any signatures on the bottom line today, butwe’re close with a few,” he said. The company plans to hold an openseason, offering 6 Bcf of working capacity and associated injectionand withdrawal rights in November. Interested parties shouldcontact Jim Fossum at WHP’s Sacramento office, (916) 488-1961.

The Lodi project would be the second merchant storage facilitybeing developed in California. The first is the Wild Goose storageproject, which is being developed by Alberta Energy Co. about 50miles north of Sacramento in a depleted dry gas field. Wild Gooseis expected to begin operations next April with 14 Bcf of workinggas capacity, firm withdrawal capability of 200 MMcf/d andinjection capability of 80 MMcf/d.

Rocco Canonica

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