Rapid industrial and commercial gas demand growth around Saskatoon, SK, has prompted provincial gas utility TransGas to launch a $35 million natural gas storage project near the town of Asquith.

“Industry growth continues to drive demand for more natural gas storage. The number of industrial and residential customers in the Saskatoon region is now responsible for more than 30% of the peak winter natural gas load in our province — a 50% increase over five years ago,” said Industry and Resources Minister Eric Cline on behalf of Crown Investments Corporation Minister (CIC) Maynard Sonntag.

The project reflects additional storage needs of major industrial customers including SaskPower’s expansion of the Queen Elizabeth Power Station and the cogeneration facility at the Potash Corporation of Saskatchewan’s mine near Cory, according to TransGas.

Over the next three years, the company will leech four large underground salt caverns near Asquith. The first two caverns in the Asquith Storage Project will be available for use in 2005, with the entire project completed by 2006. Each of the two initial caverns will be able to hold a little more than 800 MMcf of working gas. When completed, the four caverns are expected to hold a total of 3.7 Bcf of working gas, have a maximum withdrawal rate of about 100 MMcf/d and an injection rate of 50 MMcf/d. TransGas also said there also is enough remaining salt in the acreage to leech four additional bedded salt caverns and double the entire project’s working capacity to 7.4 Bcf.

“TransGas pioneered North America’s first underground salt caverns for natural gas storage in Melville in 1964, and today gas storage is one of our key business lines,” said TransGas Vice President Daryl Posehn. “While natural gas storage will continue to play a major role in meeting our customers’ demands on cold winter days, our storage system is also located at the center of the North American energy market. We see tremendous potential in the future for a storage system which is located between major gas producing areas to the west and large energy consuming centres in eastern Canada and the United States.”

TransGas said the salt caverns for the project will be solution mined about 3,500 feet beneath the surface. Pumped water will create caverns approximately the size of 12-story office buildings. Each cavern takes about 14 months to create. TransGas currently operates 23 total bedded salt caverns located at Bayhurst, Landis, Melville, Moosomin, Prud’homme and Regina. It also operates two depleted reservoir storage fields in Unity and Pierceland.

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