Expressing frustration but continuing its resolve, Texas-basedWestern Hub Properties is ironing out some “technical issues” offinancing with California regulators and now expects to startconstruction in February on its delayed Lodi gas storage field innorthern California.

The merchant storage project will be operating by this time nextyear, said Western Hub’s California-based manager, Jim Fossum, whoadded that with faster approvals, the project could have been inservice during this summer’s electricity generating crunch and thecurrent gas and power shortages.

Despite the regulatory struggle, he said the company still plansto go through with its other California storage project nearBakersfield and the natural gas hub called Wheeler Ridge. Westernhas acquired leases on the property it needs and will start moredetailed engineering of the proposed site over the first three tosix months of next year. The company intends to make a filing withstate regulators in summer of 2001.

In both the approved Lodi project and the proposed Wheeler Ridgestorage field, Western is not concerned about lining up customers,said Fossum. The projects are not contingent on contracts, he said.”Now that we are a bona fide (certified plant) utility under theCalifornia Public Utilities Commission, we are getting sometechnical things worked out with the commission staff and nailingdown the last small pieces of property, Fossum said. “Everything isbasically ready to go at Lodi”

“We have to file with them documents that verify certain aspectsof the project’s financing. We can’t move ahead with the financinguntil the CPUC approves it.

“If we had not encountered all of the roadblocks that we havehad, we could have helped with the problems this last summer, andwe could be helping with problems right now.” He added that theproject would not be operational in time to have any impact on theupcoming summer electricity demand and corresponding heavy naturalgas demand to fuel power plants.

Lodi and the Wheeler Ridge storage project are being designed ashigh-deliverability storage facilities. Lodi will have about 9 Bcfof working capacity, building to 12 Bcf. Initially, Fossum said,Lodi should have about 400 MMcf/d injection capability and 500MMcf/d withdrawal.

In the southern half of the state, Western for some time hasbeen doing reservoir studies near Wheeler Ridge and now has a”couple of reservoirs that we think might work,” Fossum said.”We’re in the preliminary planning phase.”

The Wheeler Ridge project would have an ultimate workingcapacity of 12 to 16 Bcf and similar 500 MMcf/d deliverability atits peak. He said Western hopes to have something operational inthe Wheeler Ridge area by the end of 2002.

Richard Nemec, Los Angeles

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