UPDATE 1-Sempra adds natural gas storage capacity in Mississippi

NEW YORK Aug 23 (Reuters) - Sempra Energy's U.S. Gas & Power unit has received government approval to put into service previously added gas storage capacity at its underground storage facility in Mississippi to meet growing demand to store ballooning supplies of the fuel, the company said on Thursday.

The company has added 7.5 billion cubic feet of gas storage capacity at its Mississippi Hub storage facility in Simpson County, Miss., bringing total capacity to 15 bcf, after receiving approval from the U.S. Federal Energy Regulatory Commission.

Natural gas supplies have increased sharply over the last four years as producers have improved hydraulic fracturing technologies that allow them to release gas trapped between tight layers of rock beneath ground.

The storage area is located near three major interstate gas pipelines that serve the U.S. Southeast gas market. The pipelines are El Paso Pipeline Partners' Southern Natural Gas Co. pipeline, which is owned by Kinder Morgan Partners, Williams Partners' Transco pipeline, and Southeast Supply Header, owned by a joint venture between CenterPoint Energy, and Spectra Energy.

The facility could also serve as a storage hub for future delivery of gas to future liquefied natural gas export terminals along the Gulf Coast, Sempra said. It has an injection capability of 450 million cubic feet per day (mmcfd) and a withdrawal capability of 1,200 mmcf/d, the company said.

The state of Mississippi's total gas storage capacity in 2010 was 235,638 million cubic feet, a 12 percent increase from 2009, according to the U.S. Energy Information Administration (EIA).

The agency pegs total peak working gas capacity in the U.S. at 4.103 trillion cubic feet as of April 2011. The EIA is expected to release an updated gas storage report next month.

Sempra expects to complete construction on a third 7.5 bcf cavern in 2013, boosting storage capacity at the site to 22.5 bcf.