Unocal Windy Hill Gas Storage LLC has asked FERC to exempt from Section 7 requirements of the Natural Gas Act (NGA) “certain temporary acts and operations” that it plans to undertake to assess the feasibility of building a new natural gas storage facility in Colorado.
The NGA allows the Federal Energy Regulatory Commission to excuse temporary acts or operations from Section 7 requirements, the Sugarland, TX-based company said. “The public interest is plainly served by authorizing Windy Hill to go forward with the proposed exploratory activities. Without the data that will be collected as a result of these activities, Windy Hill will be unable to make informed decisions as to whether the planned gas storage facility is feasible.”
Windy Hill called on FERC to give it the green light to conduct subsurface feasibility testing by Aug. 1. “The requested approval date coincides with anticipated state approval of Windy Hill’s drilling application, and will allow Windy Hill to contract for the required drilling equipment to perform the required subsurface testing just in advance of the traditional peak drilling period in the Rockies from September to March, during which period rig availability is limited,” the company told FERC [CP04-367].
Windy Hill estimated that all activities on the 1,280-acre site would be completed within approximately six months of Commission approval.
The exploration activities would be a precursor to the development of a new bedded salt cavern gas facility in Morgan County, CO, which would consist of three to six salt caverns capable of providing storage capacity and deliverability for 6 to 9 Bcf of natural gas, the company said.
“Given the increased gas production in nearby Rocky Mountain regions and the recent and planned construction of expanded pipeline infrastructure in the area, Windy Hill believes that there is considerable need for complementary new storage facilities in the area.”
Currently, there are eight storage facilities operating in Colorado, three of which are located in Morgan County, with a total working gas capacity of 40.62 Bcf. A ninth storage facility is out of service, and a new project has been proposed by AES Corp.
“The planned [Windy Hill] storage facility could serve operational balancing requirements of pipelines, provide load following services to electric generators and provide pipeline customers imbalance resolution service and the ability to store gas during periods of low demand when pipeline capacity is available and to withdraw gas during periods of high demand when upstream capacity is at a premium.”
If the tests are favorable, Windy Hill said it will file an application with FERC seeking a Section 7 certificate to construct, own and operate the storage facility. It hopes to begin construction of the caverns as early as mid-2006, with the first cavern going into operation in early 2008 and successive caverns in 2009 and 2011.
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