Less than a week after FERC approved part of its phase-twoexpansion of its storage caverns in Mississippi, Petal Gas StorageLLC has kicked off an open season to determine whether there’s ademand for another expansion.

The FERC-approved Phase II expansion, which is fully subscribed,will increase the working gas capacity of Petal’s two Mississippistorage facilities to 10 Bcf by the scheduled in-service date ofJune 2001. If the current open season, which ends April 14, issuccessful, Petal will seek Commission approval later this year toadd another 5 Bcf of working gas capacity by leaching a thirdcavern, said Vice President David Hayden. That capacity wouldbecome available by June 2003.

In the meantime, Petal has an amended application pending tobuild about 5.5 miles of 36-inch looping from its storage field toa point of interconnection with Tennessee Gas Pipeline’s 500 Linein Mississippi and to add 20,000 horsepower of compression[CP00-59-001]. Also, Tennessee is planning to seek an expansion ofits 500 Line serving Petal in either May or June.

The two projects would boost Petal’s existing deliverability,which is 320 MMcf/d, to about 1 Bcf/d by mid-2001 and to 1.5 Bcf/dby mid-2003, according to Hayden. Its injection rate would be aboutone half of those levels, he added.

The additional working gas capacity and deliverability will beneeded to satisfy the projected growth in gas demand by powergenerators in the Southeast over the next five to six years, Haydentold NGI. “The power development is creating a big surge in demandfor high-deliverability storage.”

Southern Company, parent of several utilities in the Southeast,has expressed some concern because the amended application beforeFERC doesn’t include Petal’s original commitment to build 60 milesof interstate pipeline — in addition to the looping andcompression.

Southern said its agreement for 7 Bcf of firm storage capacityand 700,000 MMBtu/d of firm storage withdrawal rights was based onthe pipe facilities being built to deliver gas to interconnectionswith Southern Natural Gas, Destin Pipeline and Transcontinental GasPipeline.

But Petal has proposed to bifurcate its original projectproposal, with it handling the looping and compression andTennessee agreeing to expand its deliverability from Petal storage,Southern Company said. “This latter application [of Tennessee’s]has not been filed yet and the details of the arrangement underwhich such capacity will be made available to Petal, and throughPetal to Southern Company, are uncertain,” it told the Commission.

“…..[U]ntil the related Tennessee application is filed,Southern Company will not be able to satisfy itself that thecombined Petal and Tennessee applications, if approved, willfulfill the commercial terms agreed upon by Petal and SouthernCompany as contained in the precedent agreement…..Clearly, on astand-alone basis [Petal’s amended application] does not do thatsince it fails to provide Southern Company with 700,000 MMBtu perday of firm storage withdrawal capability delivered into Southern,Destin and Transco.”

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