FERC OKs Amended Petal Storage Project
FERC last week gave Petal Gas Storage LLC. the go-ahead to
expand an existing interconnect between its storage cavern
facilities in Mississippi and affiliate Tennessee Gas Pipeline,
despite strong objections from shippers that the company's project
was an overt display of affiliate preference.
Specifically, Petal was awarded a certificate to build a 5.5
mile, 36-inch diameter storage header loop, add 20,000 horsepower
of new compression and associated facilities within or adjacent to
its storage facilities in Forrest County, MS.
Petal sought permission to expand its interconnect with
Tennessee's 500 Line in an amended application that it filed last
February [CP00-59-001]. The revised proposal nixed the storage
company's initial plans to build facilities to interconnect with
Transcontinental Gas Pipe Line Corp., Southern Natural Gas and
Destin Pipeline in favor of the expanded interconnect with
Tennessee, which prompted shippers to accuse Petal of affiliate
favoritism and exerting market power over storage in the Gulf Coast
El Paso Energy, which owns Tennessee, acquired Crystal Gas
Storage Inc., Petal's parent company, last January.
But FERC didn't share shippers' concerns. "While the deletion of
the proposed interconnects [in the initial application] abrogates
Petal's accessibility by shippers on Destin, Sonat and Transco,
there are numerous other [storage] alternatives available to those
shippers in the production area," the order said. It noted there
are 47 storage facilities in the Gulf Coast from which shippers can
choose, with an existing working gas capacity of 658,204 MMcf/d and
maximum deliverability at 18,915 MMcf/d.
There was nothing in Petal's amended proposal to justify
withdrawal of the market-based rates for storage services that FERC
previously had awarded the company, the Commission said. Petal can
charge market-based rates "provided [it], its parent company
(Crystal) and El Paso Energy continue to operate their storage
facilities independently." But Petal's market-based rate authority
will be subject to periodic re-examination in the event it
constructs new storage facilities or another affiliate enters the
storage or transportation market in the Gulf production region, the
Petal sought to expand its deliverability on Tennessee when FERC
approved its proposal to expand the total storage capacity of its
Mississippi caverns by 5.4 Bcf and working gas capacity by 4.8 Tcf
to meet the growing demand for storage service by electric
generation facilities in the Southeast. Southern Company Services
had signed up for much of it, executing a 20-year agreement for 7
Bcf of firm storage capacity.
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