The Federal Energy Regulatory Commission has approved a Houston-based start-up company’s proposal to build the first liquefied natural gas (LNG) peak-shaving storage facility in Florida.

Floridian Natural Gas Storage Co. LLC (FGS) proposes to site its peak-shaving facility on the 145-acre Florida Steel Superfund site near Indiantown in Martin County near the Florida Gas Transmission (FGT) and Gulfstream Natural Gas System LLC pipelines, as well as build pipeline facilities to interconnect with Gulfstream and Florida Power and Light Co. (FPL). The majority owner of FGS is Targa Resources Inc.

“FGS’s storage project should not have any adverse impact on existing pipelines or their customers. Rather, it should enhance competition in the region by providing additional storage service in Florida serving, among other markets, the electricity generators that have experienced steady growth in gas use,” the agency order said [CP08-13].

“Having gas stored at the FGS facility will enable these electric generator customers to better manage their fuel supplies because they will have an at-the-ready source of natural gas when needed for peaking supplies or when the market or weather conditions, such as hurricanes, necessitate access to an additional supply source,” it noted.

The proposed storage facility, which would be completed in two phases, would provide up to 8 Bcf of new firm storage capacity with a design sendout capacity of 800 MMcf/d and design liquefaction rate of 100 MMcf/d, according to the order. An open season for Phase I capacity (4 Bcf) concluded in March and was oversubscribed (see Daily GPI, March 16). Phase I is expected to begin operation in late May 2011, while Phase II is targeted for service by March 2016.

The project application, which was filed at FERC in late 2007, also calls for the construction of two LNG storage tanks, a liquefaction system with the capacity to process 100 MMcf/d; a vaporization system with the capacity to process 800 MMcf/d; and a natural gas liquids storage system that could store up to 240,000 gallons of heavy hydrocarbons (see Daily GPI, Nov. 8, 2007).

The plant would be built by Chicago Bridge & Iron Co., which has built more than 40 LNG terminals and peak-shaving plants and 120 cryogenic LNG storage tanks around the world. Gas would be delivered to and from the facility via Florida’s two existing pipelines — FGT and Gulfstream.

LNG peak shaving is nothing new. It has been a critical part of natural gas supply infrastructure in the Northeast for decades. There are more than 20 LNG peak-shaving facilities in the Northeast alone.

FERC granted FGS’s request to charge market-based rates for all firm and interruptible storage service.

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