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Avista, PG&E Plan More Tests for Storage Field

Avista, PG&E Plan More Tests for Storage Field

Avista Corp. and PG&E Gas Transmission-Northwest (PG&E GT-NW) are inching closer to adding a new gas storage field in the storage-poor Pacific Northwest region and have petitioned FERC for an exemption from Section 7 certificate requirements in order to further test the site.

Since announcing the proposed Columbia Hills storage project last spring, the two companies obtained leases and drilling permits from the Bureau of Land Management and drilled two wells to test the layered basalt geology at the Benton County aquifer (see NGI, April 5, 1999).

"The results obtained from drilling Well No. 1 revealed that there are zones that warrant additional testing for potential natural gas storage," the company told FERC. As a result, they formed a joint venture called Stanfield Hub Services LLC. PG&E GT-NW will remain project manager and will continue to manage proposed testing and drilling activities. But the company needs an exemption from FERC to continue feasibility testing pending a determination on whether to proceed with the project. Testing will require drilling at least six more wells and conducting hydrogeologic and water chemistry testing on the additional wells. If the tests are successful, the company intends to apply to the Commission for a Section 7c certificate.

"The public interest is plainly served by permitting LLC to conduct its preliminary testing of the site in the temporary manner proposed in this petition. LLC is proposing to develop a significant new gas infrastructure facility to serve the growing Pacific Northwest market, using a new storage technology. Without conducting the preliminary testing and drilling activities, LLC will have no basis for an informed business decision about developing the site and the public could lose the benefits of have a new storage site developed," the company told FERC. Because the activities may yield wells that could later be incorporated into a jurisdictional storage facility, the company believes it is appropriate to seek a "temporary acts or operations" exemption.

The exemption requested is consistent with Commission precedent, the company said, referring to Commission actions on other storage projects involving Avoca Natural Gas Storage, Central New York Oil & Gas and others.

The storage project if built would be located in Washington across the border from the Stanfield Hub in Oregon, where the interstate pipelines of PG&E GT-NW and Williams (Northwest Pipeline) connect. Despite the desperate need for gas storage in the region, unfavorable geology has left the market with only two other facilities within several hundred miles, both of which recently underwent expansions.

Avista is part owner with Williams of the Jackson Prairie underground storage facility in western Washington, which recently was expanded to 18 Bcf of working gas capacity from 15 Bcf and to 850 MMcf/d of deliverability from 550 MMcf/d. The only other storage facility in the region is Northwest Natural Gas's Mist (OR) facility 50 miles northwest of Portland. Mist also rolled out the first part of an eight-year, $122 million expansion last year. The first phase increased working gas capacity at Mist to 8.5 Bcf from only 6.5 Bcf and raised deliverability to 125 MMcf/d from 80 MMcf/d.

But PG&E GT and Avista also may face some additional storage competition in the region in the near future. Western Hub Properties LLC, which is developing the Lodi Gas Storage project near Lodi, CA, as well as another storage facility in Bakersfield, CA, is searching for locations in the Pacific Northwest to develop new high-deliverability gas storage hubs. The company still has not announced any of locations, however.

Rocco Canonica

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