NUI, Duke units to build fast withdrawal gas storage


by the OGJ Online Staff

HOUSTON, Apr. 30 -- NUI Corp., Bedminster, NJ, and a unit of Duke Energy Corp. Monday reported an agreement to enlarge to 10 bcf from 1.1 bcf a natural gas storage facility that will feature the fast-fill and withdrawal capabilities associated with salt cavern storage.

The Saltville, Va. storage field will be jointly developed by NUI's Virginia Gas Co. and a subsidiary of Duke Energy Gas Transmission (DEGT). Financial details were not disclosed, but subsidiaries of NUI and DEGT have agreed to basic terms of the partnership and to create a limited liability company, Saltville Gas Storage Co. by May 15.

The agreement calls for expansion of the storage facility and its connection to DEGT's East Tennessee Natural Gas (ETNG) mainline system. At full capacity, the Saltville storage field will be able to deliver up to 500 MMcfd to area markets.

NUI CEO John Kean Jr. said the proposed storage facilities can play a major role in satisfying the rapidly growing demand for natural gas in the region, including significant demand from local distribution companies and power plant projects.

Development of the Saltville facility is the next step in implementing NUI's business strategy of creating strategically located energy-trading hubs through its wholesale energy trading arm, NUI Energy Brokers, Kean said. The hubs will allow the NUI, which operates gas utilities in seven states on the eastern seaboard, to capitalize on the energy supply, wholesale trading, and portfolio management opportunities arising in rapidly developing regions, he said.

"Our energy trading strategy focuses on acquiring critical capacity in areas where the demand for natural gas and power generation provides a unique opportunity to capitalize on our trading and energy management skills,'' Kean said. "By expanding the Saltville storage field, NUI will further bolster its presence in the mid-Atlantic markets and be positioned to expand its natural gas trading and wholesale activities in this region.''

The transaction is subject definitive agreements and various state and federal regulatory approvals.

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