D-Lo Gas Storage LLC (DGS), a new entrant in the natural gas storage business, has filed an application to build a facility in the D’Lo Salt Dome underground salt formation in south-central Mississippi.

The Louisiana-based company, which is 100% owned by D’Lo Holdings LLC, proposes to construct three caverns, with a combined working gas capacity of 24 Bcf, and pipeline interconnections to existing interstate and intrastate pipelines in Mississippi’s Simpson and Rankin counties. The connections would be with Boardwalk Pipeline, Kinder Morgan Midcontinent Express Pipeline (MEP), Southern Natural Gas, Southcross Pipeline and Gulf South Pipeline.

The interconnect to Boardwalk would have a flow capacity of 500 MMcf/d; the interconnect to Southern Natural would have an estimated flow capacity of 250 MMcf/d; the interconnect to MEP is to have a flow capacity of 500 MMcf/d; the Southcross interconnect would have flow capacity of 50 MMcf/d; and the interconnect to Gulf South is to have a flow capacity of 50 MMcf/d, according to DGS.

DGS has asked the Federal Energy Regulatory Commission to issue a final order by July so it can begin construction by next winter. It expects to start providing storage services in the fourth quarter of 2014.

“The project will meet the growing demand for firm and interruptible high-deliverability natural gas storage services to support deliveries of natural gas to widely variable electric power generation loads, and to provide services to growing local distribution companies and other markets that require highly reliable natural gas service in Mississippi and the northeastern, Mid-Atlantic and southeastern regions of the United States, including Florida,” DGS told the Commission [CP12-39].

DGS said it plans to hold an open season for storage capacity in March. It said it “has obtained sufficient expressions of market interest to date to allow the owners to go forward with this application,” and believes that “formal precedent agreements for substantially all of the proposed capacity will be forthcoming following approval of the project.”

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