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State Oil and Gas Board of Alabama Grants Falcon's MoBay Storage Hub
HOUSTON, Oct 16, 2008 (BUSINESS WIRE) -- MoBay Storage
Hub LLC, an affiliate of Falcon Gas Storage Company, Inc., today announced
that the State Oil and Gas Board of Alabama has entered an order granting
MoBay's petition to establish the North Dauphin Island Gas Storage Facility.
At the special hearing on October 14, 2008, the Board also approved the
horizontal and vertical boundaries of the gas storage facility and appointed
MoBay facility operator.
MoBay will convert the depleted North Dauphin Island unit into a high-deliverability,
multi-cycle (HDMC) underground storage facility as part of Phase I of
the MoBay Storage Hub project. Phase I will provide 50 Bcf of working
gas storage capacity with direct interconnects to the Gulfstream pipeline,
Southeast Supply Header (SESH), Transco Pipeline and Gulf South Pipeline
MoBay received a certificate of public convenience and necessity from
the Federal Energy Regulatory Commission (FERC) in December 2006 authorizing
MoBay to construct and operate the MoBay Storage Hub.
"The State Oil and Gas Board's approval is another important milestone
in the MoBay Storage Hub's development," said Edmund Knolle, MoBay's chief
operating officer. "We look forward to working closely with the Board,
the Alabama Department of Conservation and Natural Resources, and other
federal, state and local agencies as we move forward with developing the
nation's easternmost natural gas trading hub. The MoBay project will provide
important and long-lasting benefits to the State of Alabama, the greater
Southeast and Gulf Coast gas markets, as well as communities in South
Mobile County, Alabama."
In addition to the FERC and State Oil and Gas Board approvals, MoBay has
received permits and approvals under sections 10 and 404 of the Clean
Water Act, section 7 of the Endangered Species Act, section 401 Water
Quality Certification, Coastal Zone Consistency, Air Permits from the
Alabama Department of Environmental Management, and other federal, state,
and local permits and approvals. MoBay also has been granted tax abatement
by the Industrial Development Authorities of Bayou La Batre and Dauphin
MoBay executed a long-term storage lease with the State of Alabama in
February 2008 covering 25,000 acres over the North Dauphin Island, Northwest
Dauphin Island and Northeast Petit Bois reservoirs. All three depleted
naturally occurring reservoirs lie under the shallow waters of the Mississippi
Sound in South Mobile County, Alabama.
MoBay began Phase I development in July 2008 with the plugging and abandonment
of 10 production wells and the removal of the Northwest Dauphin Island
platform. MoBay plans to complete facility engineering and refurbishment
of the existing North Dauphin Island platform later this year. Project
financing for the remainder of Phase I development is expected to close
in early 2009. The anticipated in-service date for Phase I is the second
quarter of 2010.
To date, MoBay has contracted with 14 customers to provide more than 40
Bcf of HDMC storage service under multi-year contracts.
About Falcon Gas Storage Company, Inc.
Through its wholly-owned subsidiaries and affiliated companies, Houston-based
Falcon Gas Storage Company is one of the largest independently owned developers
and operators of high-deliverability, multi-cycle (HDMC) natural gas storage
capacity in the United States. Falcon's NorTex Gas Storage Company subsidiary
owns and operates 35 Bcf of gas storage capacity with nearly 1.0 Bcfd
of aggregate deliverability from Hill-Lake and Worsham-Steed. Through
its MoBay Storage Hub LLC affiliate, Falcon is developing a 50 Bcf HDMC
gas storage project in southern Alabama with 1.0 Bcfd of injection and
In addition, Falcon is developing a 20 Bcf HDMC gas storage project in
the Desert Southwest that will be located near the San Juan Blanco Hub.
Falcon subsidiaries also are involved in crude oil production, including
enhanced oil recovery; natural gas transportation, processing and NGLs
production; and natural gas, crude oil and NGLs marketing and trading.
Visit Falcon at www.falcongasstorage.com.
SOURCE: Falcon Gas Storage Company, Inc.
Falcon Gas Storage Company, Inc.
Edmund A. Knolle, 713-623-5947
or, Encore Communications
Carole Minor, 713-880-9550
Copyright Business Wire 2008