Portland, OR-based NW Natural said that it has received approval from the Federal Energy Regulatory Commission (FERC) to begin providing interstate storage services to customers throughout the region using its underground storage facilities located near Mist, OR.

“This approval paves the way for bringing major new interstate storage capacity online in our region,” said Richard G. Reiten, CEO. “This new capacity adds flexibility and strength to the region’s natural gas system while, at the same time, adding to NW Natural’s 2001 earnings.”

In May, FERC granted NW Natural a certificate to provide firm and interruptible gas storage and related transportation services to the interstate markets (see NGI, May 28). At the time it denied NW Natural’s request for market- based rates, and conditioned its approval on the requirement that NW Natural file cost-based rates. Those rates were filed in July. The commission’s action authorizes the company to proceed within these rates, subject to refund upon further FERC review.

With FERC’s ruling, NW Natural will be able to use the surplus of its 10 Bcf of underground storage capacity at Mist to help address the region’s energy challenges. The company already has five interstate customers in line who plan to use the service, said Keith White, NW Natural director of corporate and business development.

The company said back in May that it was also planning to expand its storage capacity on the Mist site in the next few years to serve more interstate customers as well as its own market. While reporting on the FERC approval, NW Natural also issued an expansion report. The company said it will soon complete major capital improvements at the Mist storage site, including a new compressor that will increase the gas sendout capacity to about 315 MMcf/d, which is sufficient to serve both the utility’s core customers as well as its interstate clients.

NW Natural currently has the ability to send out 245 MMcf/d from storage. The company also operates two LNG storage facilities, one in Newport, OR, and the other in Portland.

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