A third natural gas storage cavern has been placed in service at the Keystone Gas Storage Facility, which brings its total active gas storage capacity to 3 Bcf, Unocal Midstream & Trade (UMT) said Friday. Mining operations for the fourth and fifth caverns continue, and total capacity could reach 5 Bcf by early 2006, the Unocal Corp. subsidiary said.

Located in the Permian Basin near the Waha Hub, Keystone is a high-deliverability salt cavern natural gas storage facility that connects to the El Paso Natural Gas, Transwestern Gas Co. and Northern Natural Gas Co. pipeline system. In January, Keystone requested and received approval from the Federal Energy Regulatory Commission to provide gas storage services for interstate customers for up to 5 Bcf of gas at market-based rates (see Daily GPI, Jan. 23

“We are very pleased with the market response to the Keystone facility,” said Jim Avioli, general manager for UMT’s storage business. “We have sold out firm capacity in our first four caverns and are now talking with customers about a fifth cavern.”

Keystone has applied for Texas Railroad Commission approval to add three more caverns (6, 7 and 8) to its facility, and mining of the sixth cavern could begin by the end of this year. Other expansion efforts include installation of a third compressor later this summer.

Although the dates were not announced, Keystone plans to hold an open season for the capacity of cavern 5, and the expected future expansion of caverns 6-8. For more information, contact Avioli at (281) 287-5235 or Chris Hoekenga at (281) 287-7512.

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