Houston-based Western Hub Properties officially opened California’s second merchant underground natural gas storage facility at Lodi, just south of Sacramento, on January 1 with about 78% subscription of the facility’s phase one working capacity of 9 Bcf, according to a Houston-based Western Hub marketing manager. Utilities and marketers are the bulk of the initial customers.

The Lodi Storage Project, which eventually will ramp up to 12 Bcf of working capacity when its phase two is complete late this coming spring, has been injecting between 100 MMcf/d and 250 MMcf/d in its initial two weeks of commercial operation, said Kevin O’Toole, a Houston-based Western Hub marketing manager.

The facility, which is tied in to the Pacific Gas and Electric Co. transmission backbone system with a 35-mile, 24- and 30-inch-diameter pipeline, has an injection and withdrawal capability of 300 MMcf/d; when phase two is completed, the numbers will be 400 MMcf/d for injection and 500 MMcf/d of withdrawal capability, O’Toole said.

The California Public Utilities Commission still has not okayed Western Hub’s purchase by Aquila, and O’Toole said that the process may take somewhat longer because of the recent move by UtiliCorp to re-purchase all Aquila stock with the proposal to merge all of its operations under the Aquila name. In August, Aquila announced it had formed a partnership with ArcLight Energy Partners Fund to purchase Houston-based Western Hub Properties LLC for $220 million (see NGI, Aug. 27).

O’Toole noted that Western Hub’s past efforts to develop a second California merchant storage project in the southern half of the state are still pending and that an announcement on how they could move forward under the new Aquila ownership could be made in the next “four to six weeks.” Western has completed extensive site analysis in the area south of Bakersfield in the southern end of the central valley where a number of major interstate transmission pipelines intersect near Wheeler Ridge.

The first merchant storage field in California, Wild Goose Storage, owned by Alberta Energy Corp., opened in April 1999. Plans currently are to expand its working gas capacity from 14 Bcf to 29 Bcf. Withdrawal capability is expected to more than triple from 200 MMcf/d to 700 MMcf/d, while injection capacity would increase more than fourfold from 80 MMcf/d to 450 MMcf/d (see NGI, June 25, 2001).

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