FERC authorized Sawgrass Storage LLC to build a proposed natural gas storage facility with about 30 Bcf of working gas capacity to serve markets in the Gulf Coast production region.
"We try to promote as much gas storage as we can," FERC Chairman Jon Wellinghoff said in response to a question after the commission's monthly meeting March 15. "Storage is going to be an essential component of ensuring we can effectively deliver gas to electric generation."
FERC handed down a March 15 order issuing certificates to Sawgrass, a joint venture between Samson Investment Co. subsidiary Mill Creek Gas Storage LLC and Nicor Inc. subsidiary Cypress Creek Gas Storage LLC. FERC allowed Sawgrass to charge market-based rates for open-access firm and interruptible storage services and interruptible hub services.
In doing so, FERC overruled protests over concerns about safe operation and property rights. The commission noted that - unlike with the Turtle Bayou Gas Storage application denied in June 2011 - Sawgrass secured almost 90% of the subsurface property rights and demonstrated the need for the project through an open season that attracted 14 bids.
"We find that the proposed project would provide flexible storage services to producers, pipelines, local distribution companies, marketers, and gas-fired generation customers transporting on interstate and intrastate pipeline systems, enabling them to better manage their gas supplies," FERC said in the order. "In view of the above, we conclude that Sawgrass' proposed project should provide substantial public benefits without significant adverse impacts."
FERC attached engineering and environmental conditions to the order. Sawgrass submitted an application for the project in July 2011. The application received its FERC environmental assessment in November 2011.
Sawgrass proposed to build and operate the storage facility about 20 miles northwest of Monroe, La. The project will convert the Vaughn Sandstone Formation, a depleted gas production reservoir, into a storage facility designed to provide up to 44.5 Bcf of storage capacity, with 30 Bcf of working gas and 14.5 Bcf of base gas. The facility is designed to have a maximum injection and withdrawal capacity of 300 MMcf/d. It will connect through a 13.9-mile header pipeline to the Midcontinent Express Pipeline at a point about nine miles southeast of Farmerville, La. (CP11-523)
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(Originally published March 21, 2012, in SNL Daily Gas Report.)