Petal Gas Storage, a subsidiary of Crystal Gas Storage Inc., hasfiled with FERC to build a 64.2-mile, 36-inch pipeline to accessexpanded capacity at its Mississippi salt cavern storage facilityand make deliveries under a new, large, long term storage contractwith Southern Company Services (SCS).

Construction plans include 5.5 miles of 36-inch storage headerloop alongside the existing 20-inch storage header, a new 20,000 HPcompressor station and 58.7 miles of 36-inch bi-directional pipefrom apoint adjacent to Tennessee Gas Pipeline near Hattiesburg,MS to a Destin Pipeline meter station.Targeted completion date isMay 31, 2001.

The pipe will be used to deliver the 700,000 MMBtu/d of firmtransportation to delivery points on Transcontinental Gas Pipe Line,Southern Natural Gas and Destin for SCS. Southern Company hascontracted for 7 Bcf of storage capacity at the Petal facility. (SeeDaily GPI, May 19, 1999) The companysaid the storage expansion and pipeline is needed “to meet new demandfor natural gas storage deliverability to support growth in thegas-fired electric generation market in the southeast United States.”

Petal currently has one cavern operational with 3.2 Bcf of workinggas capacity and is leaching another to match it. That process shouldbe completed in about 14 months. The company has applied to theFederal Energy Regulatory Commission for approval to expand the twostorage caverns to 5 Bcf each of working capacity to accommodate theSouthern contract. (See Daily GPI, Sept. 17,1999) The capacity and injection and withdrawal provisions of thatcontract will enable Southern to turn over the storage capacity every30 days if necessary. Southern will require all the firm capacity onthe pipeline, Petal said. The whole project, including the work inprogress, the expansion of the two caverns and the pipeline, isexpected to cost about $120 million.

Petal has requested extension of its current authorization formarket-based storage rates for the storage expansion and is filingfor negotiated rates for transportation with traditional cost-basedrecourse rates. The company said the expansions will make itpossible to serve all its current customers, as well as Southern.Further, it will not affect other pipelines in the area since themarket demand “represents new demand related to Southern CompanyService’s movement toward greater reliance on gas-fired electricgeneration.”

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