A day after filing an application with FERC to build the Pine Prairie Energy Center, a 24 Bcf capacity high-deliverability, salt dome storage facility near the Henry Hub, Sempra Energy announced the purchase of another proposed storage project in the region, Liberty Gas Storage in Calcasieu Parish, LA, from HNG Storage for an undisclosed sum.

Located near Sempra’s liquefied natural gas (LNG) receipt terminals under development in Hackberry, LA, and Port Arthur, TX, Liberty would be integrated with the new pipelines required to deliver LNG to the U.S. markets, Sempra said. Development of Liberty will entail removing brine from two existing salt caverns with a capacity of 17 Bcf of working gas. Liberty also will install surface facilities to allow for maximum injection of 500 MMcf/d and maximum withdrawals of 1 Bcf/d.

Due to their high deliverability operating characteristics, salt-cavern storage facilities have become key components in supporting the commercial functions of power generators, pipelines, utilities, energy merchants and LNG receipt terminal operators throughout the United States, Sempra said.

“Both of these projects [Liberty and Pine Prairie] provide a good opportunity to bring gas storage to the Gulf Coast market while capitalizing on significant demand from LNG and pipeline projects there,” said Sempra Energy COO Donald E. Felsinger. “Liberty Gas Storage and the Pine Prairie Energy Center are in prime locations to support the areas of eastern Texas and southern Louisiana, where significant LNG development is underway.”

Sempra Energy has filed with FERC to build Pine Prairie on an expedited basis to serve “the widely fluctuating demands of new gas-fired electric generating facilities as well as the ‘lumpy’ pattern of gas deliveries from LNG receiving and gasification terminals.”

Pine Prairie, an indirect subsidiary of Sempra Energy Trading, told FERC its recently completed open season elicited interest over and above the 8 Bcf capacity to be developed in each of three storage caverns. The caverns are located in Evangeline Parish, Louisiana “within easy reach” of 10 major interstate and intrastate pipelines and close to sites of several proposed LNG receiving terminals or associated gas pipeline delivery points.

When all three caverns are completed Pine Prairie will have an injection capability of 1.2 Bcf/d and withdrawal capability of 2.4 Bcf/d. Sempra seeks a FERC certificate by Nov. 30 in order to begin construction before the end of the year and thus qualify for bonus first year depreciation on its federal tax bill which it says will save millions of dollars. Pine Prairie proposes to have the first cavern in service with 6 Bcf of capacity by Jan. 1, 2006.

Subsequently, its plans call for developing the second cavern to 6 Bcf capacity, then completing both caverns to total 8 Bcf capacity each. After that the third cavern would be developed. “Approval on or before Nov. 30, 2004 also will enable Pine Prairie to place its second storage cavern in service by the 2008 time frame in which several proposed LNG import terminals in the Gulf Coast region will enter commercial operation.”

Pine Prairie is close to completing negotiations for connections to six pipelines, the filing said. Deliveries would be made through five pipeline corridors. Using portions of the Louisiana Chalk Gathering System connections will be made with Tennessee Gas Pipeline, Transcontinental Gas Pipe Line, Texas Gas Transmission, Texas Eastern Transmission, ANR Pipeline and Florida Gas Transmission.

Interested customers included marketers, end users and LNG terminal developers, the application said. It seeks market-based rates for its open access firm and interruptible storage, park and loan, balancing, imbalance trading and wheeling services.

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