After almost exactly three years since the project was filed at FERC (see Daily GPI, May 23, 2002), the Southern Pines Energy Center natural gas storage project to be located in Greene County, MS appears to be finally getting under way.

Following years of delays, SGR Holdings LLC. said Wednesday that it has teamed with FPL Group Resources LLC, a subsidiary of FPL Group Inc., in an agreement to jointly construct, own and operate the new salt-dome storage project, which is expected break ground late this summer. The first phase of commercial operations are expected to begin late in the first quarter of 2007.

The companies reported that all of the major federal and state permits required for the construction of the initial phases of the Southern Pines Energy Center have been obtained. The facility is currently authorized to provide 12 Bcf of natural gas storage capacity on an open-access basis at market-based rates subject to authorizations that have been granted by the Federal Energy Regulatory Commission (FERC).

Once completed, the project will be capable of withdrawals of up to 1.2 Bcf and injections of up to 0.6 Bcf of natural gas per day. The agreement also provides for the expansion of the Southern Pines facility to a total capacity of 16 Bcf.

“We believe that the Southern Pines Energy Center will be a critically important means of ensuring that the Southeast continues to have reliable access to adequate natural gas supplies to meet growing weather-sensitive demand,” said A.J. (Tony) Clark, a principal of SGR Holdings, a privately held Houston-based company.

The facility will interconnect with Destin Pipeline Co. LLC, with additional interconnects expected with Florida Gas Transmission Co., Transcontinental Gas Pipe Line Corp., and Gulfstream Natural Gas System LLC. Southern Pines will also offer indirect access to the Southern Natural Gas Co., Tennessee Gas Pipeline Co., and Gulf South Pipeline Co. LP systems.

“As our nation’s natural gas markets experience increasing volatility, pipelines, utilities, suppliers and end users should all benefit from the reliability, flexibility, and daily balancing that Southern Pines will provide,” said Mark D. Cook, a principal of SGR Holdings. “With its multiple direct pipeline interconnections and its proximity to proposed LNG import facilities along the Gulf Coast, the Southern Pines Energy Center is ideally located to become a supply and storage market hub serving the southeastern, Mid Atlantic and northeastern United States.”

Whether the Southern Pines facility would ever be built wasn’t always a certainty. The project received a FERC certificate in October 2002, but by that time all of the merchant energy companies that had signed up for capacity in the proposed project were closing up shop, scaling back operations and beginning to sell off assets due to turns in the marketplace (see Daily GPI, Oct. 11, 2002). In April 2004, SGR Holdings said the planned facility was back on track (see Daily GPI, April 23, 2004).

SGR holdings said Southern Pines is currently offering prospective customers the opportunity to contract for storage capacity, injection rights, and deliverability under firm storage service agreements governed by the company’s FERC gas tariff. Southern Pines has a limited quantity of storage capacity available for the first quarter of 2007. For more information, contact SGR’s Cook, at (713) 914-8187, or

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