Calling his own merchant underground natural gas storage fieldin northern California a “done deal,” a Calgary-based AlbertaEnergy official speculated that any competitors in developingnonutility, market-based storage “have quite a bit of work to do”to get a competing facility up and running. It was an indirectreference to a smaller, competing facility whose backers say theywill file with California regulators Oct. 1. (See Daily GPI, Sept.21)

“We know how much work we had to do to get [our facility] up andrunning,” said Ben Ledene, marketing vice president for AlbertaEnergy’s Wild Goose Storage Inc.

“What others are talking about seems awfully aggressive.” He wasreferring to, but not naming specifically, the proposal by WesternHub Properties LLC to have a competing merchant storage operationin place by October 1999 even though its backers have not yet filedwith the California Public Utilities Commission. Wild Goose hascompleted all of its major well drilling, pipeline and other sitework, with the only major construction remaining being theinstallation in late winter of the permanent compression unitswhich have been tested at their manufacturer’s facilities in Tulsa.Temporary compressors have been used at the site to test existingfacilities and inject the initial cushion gas this summer, Ledenesaid. About 12 MMcf/d of supplies for cushion gas are currentlybeing drawn off the PG&ampE transmission pipeline.

Wild Goose is a depleted dry gas field that is in the midst of apristine hunting preserve about 50 miles north of Sacramento. Theunderground storage facility will offer 14 Bcf of inventory, withfirm withdrawal capability of 200 MMcf/d and injection of 80 MMcf/dthrough four well (one vertical and three horizontal). An18-inch-diameter, 4-mile pipeline will link the facility to PacificGas and Electric’s transmission pipeline (Line 167).

By comparison, Western Hub Properties is proposing to convert adepleted gas field 20 miles south of Sacramento near the town ofLodi to an underground storage facility with a 6 Bcf workingcapacity and 200 MMcf/d injection and withdrawal capacities. (Allof those numbers may double, its backers said, if there issufficient customer interest between now and when the project gainsCPUC approvals.) Like Wild Goose, the Western Hub project isseeking a negative declaration regarding environmental impact ofthe project.

Wild Goose’s Ledene said facilities at his company’s project aredesigned to “blend in with the surrounding environment,” and thewellheads are using water-tight marine equipment so storageoperations will not be affected by floods that occur regularly inthe winter and spring. The surrounding area is a wetlands and duckhabitat. “This is a pristine part of the country and we put in alot of extra work to make sure our facilities are going to workwell with the environment, ” Ledene said.

Wild Goose is still working to more fully subscribe the capacityof its facility, which was only partially subscribed after its openseason last fall. It is concentrating on signing smaller capacity,one-year deals, Ledene said, adding that he won’t give out customerstatistics, but he is also looking at some two- and five-yeardeals, too.

“We’ll look at almost any opportunity that comes along, but oneof our objectives this first year is to show as many differentcompanies the quality of service they will get from Wild Goose. Andif it means we give more people an opportunity to try out storagefor a year that is a good way to show people the advantage ofhaving a storage position.

“We’re going to be building some electronic nomination systemsthat we currently use at AECO (underground storage facility inAlberta, Canada). Customers will be able to nominate via computer.We have a lot of years of experience (in Canada) backing up WildGoose.”

Customers include marketers, producers and industrial customers.”We’ve got a lot of interest right now. We have done a few deals inthe last couple of weeks and we have a lot more deals to do beforeChristmas. It is a matter of letting people test drive a bit ofcapacity,” said Ledene, noting the deals will be in the 200 MMcf to500 MMcf range.

Richard Nemec, Los Angeles

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