FERC last Thursday issued a certificate to Egan Hub Storage LLC to expand its storage facility in Acadia Parish, LA, by 10.5 Bcf by adding a fourth salt dome cavern and associated facilities.
The project would include a new salt dome storage cavern with a working gas capacity of 8 Bcf; an expansion of the capacity of Egan Hub’s Line 73 header by constructing a 16.5-mile. 24-inch diameter loop; a new meter and regulating (M&R) station to increase interconnect capacity with Texas Gas Transmission; an upgrade to the existing Texas Eastern Transmission (Tetco) M&R station; and associated interconnecting piping and other facilities.
The expanded header line, which would begin at the Egan Hub facility and terminate at the Texas Gas M&R station, would allow Egan to receive and deliver gas to liquefied natural gas (LNG) takeaway pipelines in the region and to meet the increased demand for capacity at the Tetco and Texas Gas M&R stations, said the storage company, a subsidiary of Spectra Energy Corp.
When completed, the Egan Hub storage site would have an overall capacity of 42 Bcf, and its maximum daily withdrawal rate would increase to 2,700 MMcf/d from 2,500 MMcf/d. The Federal Energy Regulatory Commission has given Egan Hub one year to have the fourth cavern and related facilities constructed and placed in service.
The Commission approved Egan Hub’s request to continue charging market-based rates for storage and interruptible hub services. “Egan Hub’s aggregate share of the relevant market will remain relatively small” even with the addition of the fourth cavern, the order said [CP07-888].
“The market power study identifies 56 active storage facilities in the relevant market areas. The current combined market working gas capacity of all the facilities is 814,079 MMcf, with Egan Hub and its affiliates controlling 65,796 MMcf, a 6.3% market share. After the proposed expansion, Egan Hub and its affiliates will control 73,796 MMcf, which is 8.8% of the combined market working gas capacity,” it noted.
“Egan Hub’s market power analysis shows a calculation of a post-expansion [Herfindahl-Hirschman Index, HHI] of 1,157 for working gas capacity and HHI of 1,031 for peak-day deliverability. These measures or market concentration are well below the Commission threshold of 1,800 [for market power], indicating that with its proposed expansion, Egan Hub would be unable to exert market power in the relevant market area.”
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