The Department of Defense (DOD) has signed off on Bluewater Gas Storage LLC’s proposal to construct and operate a 300 MMcf/d pipeline to maintain the U.S. leg of a connection between its facilities in St. Clair County, MI, and an existing pipeline in St. Clair Township, Ontario.

Houston-based Bluewater currently utilizes leased capacity to import and export up to 250 MMcf/d at the border on a pipeline operated by Nova Chemicals, but those leases will terminate on Jan. 27, 2013, according to DOD. Bluewater is seeking authorization from the Federal Energy Regulatory Commission to build and operate the St. Clair River Crossing Replacement Project, which would replace the expiring leased capacity (see Daily GPI, Feb. 1).

“Bluewater is requesting the issuance of a new NGA [Natural Gas Act] Section 3 authorization and presidential permit to allow its new facilities that are under construction to connect with SCPL’s [St. Clair Pipelines LP’s] proposed facilities to create an international gas transmission system that will allow bidirectional transportation of natural gas between Michigan and Ontario,” the DOD said in a letter to FERC.

“We have reviewed the application and have no objection to the issuance of the proposed presidential permit” for Bluewater Storage.

SCPL is seeking approval from Canada’s National Energy Board to build a replacement pipeline and associated facilities to interconnect with Bluewater’s proposed facilities at the border.

Bluewater asked FERC to approve the project by May 31 so that it can be completed before the existing leases expire.

Bluewater’s natural gas storage facilities include two Niagaran reef storage reservoirs with a combined working capacity of 29 Bcf, a combined maximum peak withdrawal rate of 826 MMcf/d and a combined maximum peak injection rate of 508 MMcf/d, along with a pipeline header system consisting of about 30 miles of 20-inch diameter pipe.

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