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Petal Gas Storage Files for Delivery Pipeline

Petal Gas Storage Files for Delivery Pipeline

Petal Gas Storage, a subsidiary of Crystal Gas Storage Inc., has filed with FERC to build a 64.2-mile, 36-inch pipeline to access expanded capacity at its Mississippi salt cavern storage facility and make deliveries under a new, large, long term storage contract with Southern Company Services (SCS).

Construction plans include 5.5 miles of 36-inch storage header loop alongside the existing 20-inch storage header, a new 20,000 HP compressor station and 58.7 miles of 36-inch bi-directional pipe from a point adjacent to Tennessee Gas Pipeline near Hattiesburg, MS to a Destin Pipeline meter station. Targeted completion date is May 31, 2001.

The pipe will be used to deliver the 700,000 MMBtu/d of firm transportation to delivery points on Transcontinental Gas Pipe Line, Southern Natural Gas and Destin for SCS. Southern Company has contracted for 7 Bcf of storage capacity at the Petal facility. The company said the storage expansion and pipeline are needed "to meet new demand for natural gas storage deliverability to support growth in the gas-fired electric generation market in the southeast United States."

Petal currently has one cavern operational with 3.2 Bcf of working gas capacity and is leaching another to match it. That process should be completed in about 14 months. The company has applied to the Federal Energy Regulatory Commission for approval to expand the two storage caverns to 5 Bcf each of working capacity to accommodate the Southern contract. The capacity and injection and withdrawal provisions of that contract will enable Southern to turn over the storage capacity every 30 days if necessary. Southern will require all the firm capacity on the pipeline, Petal said. The whole project, including the work in progress, the expansion of the two caverns and the pipeline, is expected to cost about $120 million.

Petal has requested extension of its current authorization for market-based storage rates for the storage expansion and is filing for negotiated rates for transportation with traditional cost-based recourse rates. The company said the expansions will make it possible to serve all its current customers, as well as Southern. Further, it will not affect other pipelines in the area since the market demand "represents new demand related to Southern Company Service's movement toward greater reliance on gas-fired electric generation."

Ellen Beswick

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