Kinder Morgan to Expand Southeast Texas Storage Field

Kinder Morgan Energy Partners announced a major expansion project at the company's Dayton natural gas storage field that will significantly increase capacity at the Liberty County, Texas, facility.

The project, which involves development of a new underground cavern, will add an estimated 5.5 billion cubic feet (Bcf) of incremental working gas storage capacity. The two existing storage caverns currently provide 4.2 Bcf of working gas capacity.

"The project will more than double existing working gas capacity at the Dayton storage field," said KMP Chairman and CEO Richard D. Kinder. "The expansion of the facility, which is connected to KMP's Texas Intrastate Pipeline system, will greatly enhance storage options for natural gas coming from new and growing supply areas, including the Barnett Shale and Bossier plays in East Texas, and LNG along the Texas Gulf Coast. The project will also facilitate future lower-cost expansion projects that will provide additional capacity at the Dayton storage field." Kinder added that attractive expansion opportunities were among the strategic benefits identified when KMP purchased the storage field in 2005.

Drilling the well for the new cavern will begin later this month, with the additional capacity expected to be available in the spring of 2009 after the cavern is completed to its target size. The process of creating storage space for natural gas involves injecting water to dissolve the salt formation. The $76 million initiative also includes additional compression, as well as dehydration and pipeline enhancements that will increase both injection and withdrawal capabilities at the complex.

KMP's Texas Intrastate Pipeline system currently comprises more than 5,800 miles of pipeline with a peak transport capacity of about 5 Bcf/day and approximately 120 Bcf of natural gas storage capacity.