Bay Gas Storage Awarded Contracts for Natural Gas Storage Cavern #3 in Alabama

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Researched by Industrial Info Resources (Sugar Land, Texas). Bay Gas Storage Company Limited (Mobile, Alabama), a subsidiary of EnergySouth Incorporated (NASDAQ:ENSI)(Mobil, Alabama,) has started construction on the surface facilities associated with its natural gas storage cavern #3 addition. Located near McIntosh, Alabama, the #3 storage cavern will have a natural gas storage capacity of approximately five billion cubic feet to be stored deep underground in a salt dome geologic structure that is being leached at the present time. The surface facilities currently under construction include gathering and injection systems, wells and a compression plant addition. The compression will be provided by the addition of three new 6,000 horsepower Toshiba electric drives with Ariel compressors.

Bay Gas Storage had previously awarded the engineering, procurement and construction (E+P+C) contract to the Pearland, Texas office of Hatch Mott MacDonald. EnCon LC (Cypress, Texas) was awarded the general contract for the surface facilities. Bay Gas Storage expects to have the natural gas storage cavern #3 in service some time in the fourth quarter of 2007. There is presently early talk of a further expansion project at the McIntosh natural storage facility. There is no clear scope related to the future expansion but it could be as small as one or two additional caverns to as large as five additional caverns with associated compression and dehydration facilities. The wide range of scope for the prospective expansion is due to the uncertainty of just how much LNG will actually be imported and re-gasified on the Gulf Coast.

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