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Ryckman Creek gets green light from FERC

Ryckman Creek gets green light from FERC

Tuesday, August 2, 2011

Ryckman Creek gets green light from FERC
By MJ Clark and Wyoma Groenenberg - Wyoming Business Report

HOUSTON - Ryckman Creek Resources LLC has received the certificate it needs from the Federal Energy Regulatory Commission (FERC) to move forward with its proposed natural gas storage facility.

The storage facility consists of the mostly-depleted Ryckman Creek gas field in Lincoln County near the Opal Hub, which is in the center of natural gas trading and pipelines. At the facility, the company will re-inject natural gas tapped from interstate pipelines into the field for storage.

"It's a place to park or store natural gas for a period of time for customers," Ryckman Vice President of Project Development Chuck Sawyer told the Business Report when the project was first proposed. "It helps everybody better manage their gas supplies."

The capital expenditure for the construction will be more than $20 million, with an anticipated payout within five years, Sawyer told the Business Report in its Energy Wyoming publication last summer.

While storage facilities are common in other areas of the country, Sawyer said few exist in the western portion of the country. With Wyoming's vast network of interstate pipelines, the opportunity to build a storage facility outside of Evanston adjacent to the Opal Hub seemed like a perfect fit for the company, Sawyer said. 

"From this one location, we can direct gas to various areas of the entire U.S. continent, which makes it a very attractive storage location for customers," Sawyer explained.

Ryckman, a subsidiary of Peregrine Midstream Partners, filed the 7(c) Certificate application with the FERC in November 2010 and intends to file its implementation plan today, Aug. 2, with construction starting on the facility when the FERC accepts the implementation plan and Ryckman receives final approval from the Bureau of Land Management.

The high-deliverability, multi-cycle (HDMC) natural gas storage project involves converting the partially depleted Ryckman Creek Nugget Unit into a gas storage field with an initial working gas capacity of 18 Bcf when the first phase is completed in 2012.

Ryckman plans to expand working gas capacity to approximately 35 Bcf by spring 2014, increasing to a total capacity of around 50 Bcf when the Phase II expansion is finished. Maximum injection capability will be 350 MMcfd with a maximum withdrawal capability of 480 MMcfd.

"We appreciate the FERC's efficient processing of Ryckman's application and recognition of the facility's importance as the largest independently-owned gas storage project serving this part of the Rockies," said Peregrine Managing Director Jeff Foutch. "Ryckman's open season in October 2010 was oversubscribed by 35 Bcf, reflecting strong demand for the services we can provide to local markets as well as elsewhere in the Midwest and Western U.S."

Wyoming Business Report