Mobile, AL-based Bay Gas Storage Co. Ltd. will hold a nonbinding open season for 10.0 Bcf of natural gas storage capacity at its facility in McIntosh, AL. The open season relates to the planned development of two new 5 Bcf. high-deliverability, underground caverns in the McIntosh salt-dome, together with planned pipeline interconnects with Transco (Station No. 85) and SONAT (York, AL). The new caverns and pipeline interconnects are scheduled to begin service by fall 2009.

Bay Gas Storage now operates two caverns with a total working gas capacity of 6 Bcf with direct interstate pipeline connections to Florida Gas Transmission and Gulf South Pipeline and indirect connects to Destin, Gulf Stream, and Transco pipelines. A third cavern, currently in development, will add an additional 5 Bcf storage. Existing caverns 1 and 2, are fully subscribed, and cavern 3 reached full subscription well in advance of its expected fall 2007 in-service date, the company said.

“Today, Bay Gas Storage represents over 40% of [parent company] EnergySouth’s earnings,” said EnergySouth Inc. CEO Dean Liollio. “Having reached full subscription in cavern 3 and with the prospect of an additional 10 Bcf from caverns 4 and 5, Bay Gas Storage will be the dominant driver of earnings growth for EnergySouth.”

In May Bay Gas Storage said it reached a multiyear agreement with Progress Energy Florida Inc. to supply storage services to the Florida utility from the Mobile facility (see Daily GPI, May 22). The company said service is expected to begin by summer 2007. Bay Gas Storage announced the plans to add a third storage cavern in November 2005 as a result of a new storage services deal it signed with Tampa Electric Co. (see Daily GPI, Nov. 16, 2005).

“We believe additional market opportunities for salt-dome storage services exist in the mid-south region and along the East Coast, and we plan to establish interconnects with the SONAT and Transco systems as a part of this expansion project,” said Bay Gas President Greg Welch. “Our interconnects will be eastern-most of all salt-dome storage in the Southeast and will provide shippers on those pipelines access to over 20 Bcf of high-deliverability storage.”

The open season begins Oct. 5 and ends Nov. 3. An expression of interest form can be found on the company’s website and should be faxed by the close of the open season to the attention of David Hayden, vice president of business development at (251)450-4866. For more information on the open season, contact Hayden, (251) 450-4747 or dhayden@bay-gas.com.

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