FERC Friday issued a certificate to Enstor Houston Hub Storage and Transportation LP authorizing the construction and operation of a salt dome natural gas storage facility and associated pipeline facilities in Liberty County, TX.

Houston Hub proposes to site the storage facility on the North Dayton Dome near the town of Dayton, approximately 30 miles northeast of Houston. When fully developed, it would have a total capacity of 46.32 Bcf comprised of 30 Bcf of working gas capacity and 16.32 Bcf of cushion gas.

The company plans to develop four storage caverns in two phases. Houston Hub said each cavern would have a capacity initially of 6.175 Bcf (4 Bcf working gas and 2.175 Bcf cushion gas) for a total capacity of 24.7 Bcf (16 Bcf working gas and 8.7 Bcf cushion gas). The caverns under this phase of the project would be operational in 2009, according to Houston Hub, which is a subsidiary of Houston-based Enstor Inc. and Enstor Operating Co. LLC. Enstor Inc. is a subsidiary of PPM Energy Inc., which is owned by ScottishPower.

Houston Hub said it would then take the caverns out of commercial service one at a time, as service and market conditions allow, for additional solution mining to increase the capacity of each cavern to a total of 11.58 Bcf comprising 7.5 Bcf of working gas and 4.08 Bcf of cushion gas.

It projects that the storage facility would have a withdrawal capability of 1 Bcf/d and injection capability of approximately 0.6 Bcf/d. Houston Hub anticipates that the caverns will reach full capacity by 2012.

Houston Hub also plans to build a pipeline header consisting of two 2.34-mile, 24-inch diameter, bidirectional pipelines, connecting the storage facility to two interstate pipelines — Natural Gas Pipeline Co. of America and Transcontinental Gas Pipe Line.

The company said it anticipates that customers of the proposed storage facility would include local distribution companies, electric utilities, merchant power generators, industrial customers, natural gas marketers and producers serving markets in Texas, the Midwest, Gulf Coast, Southeast and Northeast.

The Federal Energy Regulatory Commission (FERC) approved Houston Hub’s request for market-based rates for its proposed firm and interruptible storage and interruptible hub services. “The Commission’s authorization to charge market-based rates places the economic risks associated with the project entirely on Houston Hub,” the agency order said [CP07-390].

The Commission also provided Houston Hub a waiver of the shipper-must-have-title policy for services in connection with its proposed storage facility.

Enstor, through its affiliates and subsidiaries, owns and operates storage projects across North America, including a facility in Katy, TX, and one in Lea County, NM.

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