FERC on Thursday granted Magnum Gas Storage LLC amendments to its certificate for natural gas storage facilities being developed in Utah, extending the timeline to complete the project and allowing wheeling service at market-based rates.
Magnum sought to change the layout of the approved facilities because of a nearby natural gas liquids (NGL) storage facility not under the jurisdiction of the Federal Energy Regulatory Commission. Magnum plans to relocate its four storage caverns and related facilities so as not to overlap with the NGL facilities. The company also plans to eliminate one brine evaporation pond and seven monitoring wells. FERC approved the changes [CP16-18].
Magnum also plans to add a new rate schedule to its tariff to allow for firm wheeling transportation service under market-based rates. “Magnum asserts that the addition of this rate schedule will enhance commercial opportunities for Magnum, provide flexibility in the market, and support the continued timely development of the overall Magnum Gas Storage Project,” the Commission said. The Commission also reaffirmed Magnum’s authority to charge market-based rates for firm and interruptible storage service.
Finally, Magnum sought an extension of time to construct its facilities and place them into service in light of changes to the project. The Commission gave the company four years from the date of its Thursday order to place the project into service.
For the purpose of establishing market-based rates for wheeling service, Magnum defined the region served by the pipelines directly connected to Magnum, including Questar Pipeline Co. and Kern River Gas Transmission, and the pipelines directly interconnected to Questar and Kern River that are located within the Rockies/Plains production area. This reflects the pipeline interconnections, market hubs and market centers in Utah, Wyoming and Colorado (the Rockies Region), the Commission said. FERC approved the application of market-based rates for wheeling based on this region.
Changes to the project were previously approved by regulators in Utah. FERC approved the initial proposal by Magnum Gas in 2011 [CP10-22]. An open season for capacity in the project was held recently.
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