El Paso Natural Gas Co. last week purchased Copper Eagle Gas Storage LLC for an undisclosed amount. Copper Eagle was set up two years ago as a joint effort by El Paso Corp. affiliate Crystal Gas Storage Inc. and Pinnacle West Energy, and it now is moving forward on its second attempt to become the Phoenix area’s first natural gas storage project (see Daily GPI, Aug. 19: Oct. 16, 2001).

The latest project, presented to the Arizona Corporation Commission in early August, would include up to three gas storage caverns created out of an existing sub-surface salt formation thousands of feet beneath the earth’s surface in Phoenix’s West Valley. Each cavern would have withdrawal capacity of 320 MMcf/d, injection capacity of 160 MMcf/d and working gas storage capacity of 3.2 Bcf.

El Paso Natural Gas noted that the number of caverns developed and the timing of the development “will be matched with customer needs.” The storage facility would be connected to the El Paso Natural Gas pipeline system, which delivers supplies to the Southwest, including the Phoenix area.

“Copper Eagle Gas Storage could be the first natural gas storage project developed in the Phoenix area,” said Patricia A. Shelton, president of the Western Pipeline Group for El Paso Corp. “We are eager to move forward with this project as soon as we receive long-term commitments from our customers.”

Although it did not specify a date, El Paso Natural Gas said it would hold a non-binding open season in the near future to determine customers’ specific needs, including the initial project’s size and the types of services to offer. With sufficient commitment, the company plans to file with the Federal Energy Regulatory Commission to begin construction by April 2004. The first cavern could be in service by early 2007, El Paso said.

In November 2001, Copper Eagle held an open season for 3.2 Bcf of firm storage services, receiving 15 bids for a total capacity that exceeded the 3.2 Bcf offered. Cavern development was scheduled begin in late 2002, and the facility originally was expected to be placed into service by late 2004.

El Paso Natural Gas purchased Copper Eagle from Arizona Gas Storage LLC and APACS Holdings LLC. Arizona Gas Storage is owned by GulfTerra Arizona Gas LLC, a subsidiary of GulfTerra Energy Partners LP and IntraGas US, a Gaz de France North American subsidiary. APACS Holdings is a subsidiary of Pinnacle West Energy, a subsidiary of Pinnacle West Capital Corp.

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