Underground

Bay Gas Storage Co. Ltd., a subsidiary of EnergySouth Inc., said Friday it plans to begin developing a third underground natural gas storage cavern and related facilities near Mobile, AL, in May, a move that would nearly double its working gas storage capacity.

Natural gas futures reached new three-week lows Thursday morning on the surprising news that 188 Bcf was pulled from underground storage last week, well below consensus estimates focused on a 200-230 Bcf draw. The March contract was dealt the biggest blow by the news, dropping 22.7 cents for the session to finish at $6.149.

Following the Energy Information Administration’s estimate that 67 Bcf was injected into underground natural gas storage during the week ended Oct. 8, November natural gas futures shot up 13 cents to notch a daily high of $6.96 as of 10:42 a.m. (EDT). However, that level did not hold.

An early-morning explosion rocked Duke Energy’s Moss Bluff underground salt cavern storage facility on Thursday in Liberty County, TX, just northeast of Houston, sending flames high into the sky and forcing the company to cut off all natural gas service at the facility. No injuries or damage to the area surrounding the storage site were reported, the company said.

The blaze at Duke Energy’s Moss Bluff underground salt cavern storage facility in Liberty County, TX, was continuing into its sixth day Tuesday, but the size and intensity of the fire has decreased significantly, according to company officials.

After burning intensely for nearly a week, the blaze at Duke Energy’s Moss Bluff underground salt cavern storage facility in rural Liberty County, TX, was extinguished around 9 p.m. (CDT) Wednesday, a company spokeswoman said.

American Electric Power (AEP) has agreed to pay Enron Corp. $115 million for all of Enron’s interests in the 7,000-acre underground Bammel gas storage reservoir near Houston and related pipeline and storage assets, including 10.5 Bcf of gas in the storage field.

American Electric Power (AEP) has agreed to pay Enron Corp. $115 million for all of Enron’s interests in the 7,000-acre underground Bammel gas storage reservoir near Houston and related pipeline and storage assets, including 10.5 Bcf of gas in the storage field.

After first rallying on the news that a whopping 100 Bcf had been injected into underground storage facilities last week, the natural gas futures market suffered a slow grind lower Thursday as traders lightened their longs ahead of Friday’s expiration. At $4.542, the October contract finished 4.6 cents lower in its penultimate trading session. It goes off the board Friday at 2:30 p.m. EDT.