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CA's First Merchant Gas Storage Set to Open

CA's First Merchant Gas Storage Set to Open

Wild Goose Storage, California's first merchant natural gas storage facility, is set to begin operations April 1, at the same time the state's second merchant storage project gets a public airing of its 18 Bcf proposal.

The California Public Utilities Commission (CPUC) is scheduled to act March 18 on market-based tariffs for Wild Goose Storage. The project's Canadian backers are being cautious in their public discussion about the numbers of customers and volumes they have under contract for the field, which is using part of a depleted dry gas field 50 miles north of Sacramento.

"Everything is looking very good," said Ben Ledene, marketing vice president for Alberta Energy Corp., backer of the new storage field. "We're very pleased from what we have seen from the reservoir and the facilities. We're in the process of providing training sessions for our customers so they understand all the services available.

"We really haven't had any surprises. It has gone much better than anybody could have thought it would. It is working out at least as well as expected if not better."

Nevertheless, Ledene hinted that the facility is under-subscribed for its initial months of operation, but he stressed that they want to make sure they provide high quality service to all of their customers during the initial months of start up and "working out the bugs." Ledene described it as "contracting a bit conservatively" for the first year.

Offering services to a variety of utilities, marketers, shippers and large industrial customers, Wild Goose provides 14 Bcf of inventory, with firm withdrawal capability of 200 MMcf/d and injection of 80 MMcf/d through four wells (one vertical and three horizontal). An 18-inch-diameter, four-mile pipeline links the facility to Pacific Gas and Electric Co.'s transmission pipeline in the area. The new, permanent compressors have been installed and are expected to be started by mid-March, Ledene said. Temporary compressors used this winter to test injection and withdrawal are now being removed. Metering, dehydration and water removal equipment all will be tested this month in preparation for the opening.

"We expect that customers will have us injecting gas during the first three or four months," Ledene said. "They probably won't have us withdrawing gas at first, but you never know."

Ledene added Wild Goose is looking at other possible sites in California and elsewhere in the U.S. We're looking around, and there are lot of opportunities."

For the $80 million Lodi storage facility sponsored by Western Hub Resources, the CPUC is holding public meetings this week to settle environmental issues. This second merchant storage facility for California will use a depleted underground natural gas field, located five miles northeast of Lodi, to store 18 Bcf. It also plans to build a compression station. The proposed storage facility would have a 6 Bcf working capacity and 200 MMcf/d injection and withdrawal capacities. All of those numbers may double if there is sufficient customer interest between now and when the project gains CPUC approvals, Western Hub said.

The company set Oct. 1 as its goal for the facility's CPUC certification. The commission said it is too early to give a timetable. One contentious issue is the planned 24-inch-diameter, 30-mile pipeline intended to hook in with PG&ampE's gas transmission operations. It will run through private property, and many landowners have objected.

Rich Nemec, Los Angeles

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