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Petal Extends Open Season For Storage Expansion

Petal Extends Open Season For Storage Expansion

At the request of potential new shippers, Petal Gas Storage L.L.C. has extended by three weeks its open season to determine whether there's enough market demand for further expansion of its two storage caverns in Mississippi.

The open season, which was scheduled to end April 14, has been extended until May 5, at which time Petal will assess whether there's sufficient interest to add another 5 Bcf of working gas capacity by leaching a third cavern, said Vice President David Hayden. If there is, he noted Petal would seek FERC approval of the project later this year with project completion targeted by June 2003.

"We feel very good about the [open season] results so far," he noted, adding that "numerous potential customers" have expressed an interest in acquiring storage capacity, but they want "more time" to make their final decision.

Petal kicked off this latest open season within days after FERC approved an expansion to boost the working gas capacity of the storage company's two Mississippi facilities to 10 Bcf by the scheduled in-service date of June 2001 (See NGI, March 27, 2000).

In the meantime, controversy continues to swirl around Petal's pending application at the Commission that seeks to add 500 MMcf/d of deliverability capacity to the storage company's existing capacity of about 320 MMcf/d by mid-2001.

Southern Company, which signed up for much of the expanded storage volumes planned by Petal, now appears to be a strong champion of the proposed deliverability expansion, even though it has been amended to exclude three pipeline interconnects that Petal had committed itself to in Southern's precedent agreement. Although it previously expressed some reservations about the revisions, Southern now has urged FERC to process the application as "quickly as practicable."

Based on Southern's initial concern, Commission staff earlier this month threatened to dismiss the deliverability expansion project for a lack of market support unless Petal could prove otherwise (see NGI, April 10)

Southern responded to staff's actions in a letter to FERC, saying that it was fully behind the Petal project and had no plans to withdraw. It "opposes the dismissal" of Petal's project. Southern said the proposed deliverability project, which entails an additional 20,000 horsepower of compression, a storage header loop and an expanded interconnect with affiliate Tennessee Gas Pipeline, was a "necessary complement" to Petal's storage-capacity expansion that FERC approved.

Susan Parker

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