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CA Storage Field Completes Wild Ride

September 28, 1998
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CA Storage Field Completes Wild Ride

Calling his own merchant underground natural gas storage field in northern California a "done deal," a Calgary-based Alberta Energy official speculated that any competitors in developing nonutility, market-based storage "have quite a bit of work to do" to get a competing facility up and running. It was an indirect reference to a smaller, competing facility whose backers say they will file with California regulators Oct. 1. (See Daily GPI, Sept. 21)

"We know how much work we had to do to get [our facility] up and running," said Ben Ledene, marketing vice president for Alberta Energy's Wild Goose Storage Inc.

"What others are talking about seems awfully aggressive." He was referring to, but not naming specifically, the proposal by Western Hub Properties LLC to have a competing merchant storage operation in place by October 1999 even though its backers have not yet filed with the California Public Utilities Commission. Wild Goose has completed all of its major well drilling, pipeline and other site work, with the only major construction remaining being the installation in late winter of the permanent compression units which have been tested at their manufacturer's facilities in Tulsa. Temporary compressors have been used at the site to test existing facilities and inject the initial cushion gas this summer, Ledene said. About 12 MMcf/d of supplies for cushion gas are currently being drawn off the PG&ampE transmission pipeline.

Wild Goose is a depleted dry gas field that is in the midst of a pristine hunting preserve about 50 miles north of Sacramento. The underground storage facility will offer 14 Bcf of inventory, with firm withdrawal capability of 200 MMcf/d and injection of 80 MMcf/d through four well (one vertical and three horizontal). An 18-inch-diameter, 4-mile pipeline will link the facility to Pacific Gas and Electric's transmission pipeline (Line 167).

By comparison, Western Hub Properties is proposing to convert a depleted gas field 20 miles south of Sacramento near the town of Lodi to an underground storage facility with a 6 Bcf working capacity and 200 MMcf/d injection and withdrawal capacities. (All of those numbers may double, its backers said, if there is sufficient customer interest between now and when the project gains CPUC approvals.) Like Wild Goose, the Western Hub project is seeking a negative declaration regarding environmental impact of the project.

Wild Goose's Ledene said facilities at his company's project are designed to "blend in with the surrounding environment," and the wellheads are using water-tight marine equipment so storage operations will not be affected by floods that occur regularly in the winter and spring. The surrounding area is a wetlands and duck habitat. "This is a pristine part of the country and we put in a lot of extra work to make sure our facilities are going to work well with the environment, " Ledene said.

Wild Goose is still working to more fully subscribe the capacity of its facility, which was only partially subscribed after its open season last fall. It is concentrating on signing smaller capacity, one-year deals, Ledene said, adding that he won't give out customer statistics, but he is also looking at some two- and five-year deals, too.

"We'll look at almost any opportunity that comes along, but one of our objectives this first year is to show as many different companies the quality of service they will get from Wild Goose. And if it means we give more people an opportunity to try out storage for a year that is a good way to show people the advantage of having a storage position.

"We're going to be building some electronic nomination systems that we currently use at AECO (underground storage facility in Alberta, Canada). Customers will be able to nominate via computer. We have a lot of years of experience (in Canada) backing up Wild Goose."

Customers include marketers, producers and industrial customers. "We've got a lot of interest right now. We have done a few deals in the last couple of weeks and we have a lot more deals to do before Christmas. It is a matter of letting people test drive a bit of capacity," said Ledene, noting the deals will be in the 200 MMcf to 500 MMcf range.

Richard Nemec, Los Angeles

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ISSN © 2577-9877 | ISSN © 1532-1266
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