The first two gas storage caverns at the Keystone Gas Storage Project near Kermit, TX are up and running, offering 2 Bcf of high deliverability salt cavern gas storage capacity, according to Unocal Keystone Gas Storage LLC. The project, which became operational in late August, has the capacity to inject 100 MMcf/d and to withdraw 200 MMcf/d.

The Unocal Corp. subsidiary, headquartered in Sugar Land, TX, connects by pipeline with the natural gas systems operated by El Paso Natural Gas Co. and Northern Natural Gas. Located in the Permian Basin supply area near the Waha Hub, Keystone is expected to ultimately provide 5 Bcf of capacity, said the company. The facility is designed to meet the intra-day, multiple-turn storage service requirements of power generators, as well as the pipeline companies, producers and marketers serving them.

Noting that the new facility offers the storage services that have “historically been lacking” in the existing infrastructure of the area, Joseph Blount, president of Unocal Keystone said that the completion of the first two caverns and start-up of gas injection operations was a “major milestone.”

Unocal has already begun to develop the next 2 Bcf of storage capacity at Keystone, with targeted capacity of 5 Bcf by the third quarter 2005. Keystone is licensed to provide intrastate storage services to the Texas market, and has applied to the Federal Energy Regulatory Commission to provide storage services to the interstate market. The company anticipates FERC approval before the end of the year.

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