FERC on Tuesday gave Starks Gas Storage LLC the go-ahead to proceed with the construction of the first stage of a two-cavern salt dome storage facility that will be located between Lake Charles, LA, and the Texas border.

The project, which FERC approved in July 2005, calls for the construction of a two-cavern facility, with total capacity of 29 Bcf, and header system in two stages over the next two years. Stage I would prepare the Starks 1 cavern with a capacity of 13.3 Bcf, including 8.8 Bcf of working gas and 4.5 Bcf of cushion gas. This system would have a withdrawal rate of 400 MMcf/d and an injection rate of 375 MMcf.

Specifically, the latest order gives Starks Gas authorization to move ahead with the conversion of an existing brine extraction well to a natural gas storage cavern (Starks 1 cavern); and the installation of two salt water disposal injection wells, a Starks Compressor Station, a 30-inch diameter gas pipeline that would extend from the injection wells to an interconnect with Tennessee Gas Pipeline [CP05-8].

The storage project, which had been owned by EnCana Corp., was sold in May to a private equity fund managed by Riverstone Holdings and The Carlyle Group, headquartered in New York City and Washington, DC, respectively. Niska Gas Storage, a private company owned by the fund and the largest independent gas storage provider in North America, directly oversees the Starks Gas project now.

Phase II, which would involve the Starks 2 cavern, would bolster total storage capacity by an additional 15.6 Bcf capacity, with 10.4 Bcf of that working gas. When it goes on line, the total peak withdrawal rate of the two caverns would be 800 MMcf/d with a 750 MMcf/d injection rate, according to the company.

A 35-mile, 30-inch diameter header system would eventually connect the storage field with Tennessee, Texas Eastern Transmission and Williams’ Transcontinental Gas Pipe Line. The header also would cross or approach the proposed routes of several new pipelines being developed to connect new liquefied natural gas terminal facilities to the marketplace.

The entire storage project is targeted for service in the second quarter of 2008, according to the company.

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