Kinder Morgan Energy Partners LP (KMP) said it will spend $76 million to expand its Dayton natural gas storage field in Liberty County, TX to increase capacity. The project, which involves development of a new underground cavern, will add an estimated 5.5 Bcf of incremental working gas storage capacity. Two existing storage caverns currently provide 4.2 Bcf of working gas capacity.

Drilling the well for the new cavern will begin later this month, with the additional capacity expected to be available in the spring of 2009. The expansion will include additional compression, as well as dehydration and pipeline enhancements that will increase both injection and withdrawal capabilities at the complex.

“The project will more than double existing working gas capacity at the Dayton storage field,” said KMP CEO Richard D. Kinder. “The expansion of the facility, which is connected to KMP’s Texas intrastate pipeline system, will greatly enhance storage options for natural gas coming from new and growing supply areas, including the Barnett Shale and Bossier plays in East Texas, and [liquefied natural gas] LNG along the Texas Gulf Coast. The project will also facilitate future lower-cost expansion projects that will provide additional capacity at the Dayton storage field.”

KMP’s Texas intrastate pipeline system is currently comprised of more than 5,800 miles of pipeline with a peak transport capacity of about 5 Bcf/d and 120 Bcf of natural gas storage capacity.

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