Major Hub
Falcon says the MoBay storage hub is expected to create a major new market center for natural gas in the Gulf Coast and is designed to provide secure natural gas supplies during extreme weather events and other deepwater supply disruptions. Specifically, the FERC order authorizes MoBay to construct and operate a natural gas storage hub and associated pipeline facilities consisting of:

• Three underground substantially depleted natural gas storage reservoirs located offshore in Alabama state waters

• Up to 30 new injection and withdrawal wells supported by 10 offshore caissons and approximately seven miles of offshore distribution pipeline connecting the injection and withdrawal wells to two existing offshore platforms

• An onshore compressor station with 37,880 horsepower (HP) of compression

• Three metering stations and approximately three-and-a-half miles of 24-inch diameter pipelines, creating a header system connecting the onshore facilities to four nearby interstate natural gas pipelines

• Two 8,500 HP compressor units located offshore on a platform owned by MoBay

• Thirty six-inch diameter pipeline, about 15.5 miles, connecting the storage reservoirs to the onshore compressor station

Edmund Knolle, MoBay CEO, said in a recent statement that: “By 2010, natural gas demand in the Southeastern United States is expected to increase 16 percent over 2004 demand.

“Gas demand in Alabama alone is expected to increase by 50 percent during the same period. MoBay will significantly enhance energy security and reliability in this growing region, providing utilities, producers, LNG importers, gas marketers and industrials with a strategically located, highly liquid trading hub downstream of major pipeline bottlenecks.”

MoBay has executed precedent agreements for 30 bcf of working gas capacity and 0.575 bcfd of daily withdrawal capability. Shippers include electric utilities, producers, marketers and municipal gas districts. MoBay plans to hold a non-binding open season later this year for the remaining capacity.

MoBay says it expects to finalize remaining state permitting requirements shortly and start construction in April 2008. The target in-service date will be Oct. 1, 2009.