The storage facility would be developed in conjunction with Pacific Gas and Electric Company (PG&E). The facility will use depleted sandstone natural gas reservoirs and has the potential for additional development if future market demand is favorable.
The first phase of the project is estimated to have an initial total capacity of about 20 billion cubic feet (Bcf), with 15Bcf of that capacity owned by Gill Ranch Storage (GRS) and 5Bcf owned by PG&E. The estimated first-phase completion time is late 2010.
Investment by GRS in the initial phase of the project, if constructed, is expected to be approximately $150 million. Capital expenditures in 2008 by GRS are estimated at approximately $10 million for various project permitting and development activities.
GRS will initially serve as operator of the storage facility and will own 75% of the capacity and investment in the first phase of the project and PG&E will own 25%. The project includes the storage field, a 25-mile pipeline connecting the storage field to PG&E’s gas transmission system, compression equipment and other facilities.
