Profile: Niska Gas Storage Partners LLC (NKA)
7 Mar 2014
Niska Gas Storage Partners LLC (Niska Partners), incorporated on January 27, 2010, owns and operates natural gas storage assets. The Company owns or contracts for approximately 225.5 billion cubic feet of total natural gas storage capacity. Its assets are located in key North American natural gas producing and consuming regions and are connected at strategic points on the natural gas transmission network, providing access to multiple end-use markets. The Company stores natural gas for a broad range of customers, including financial institutions, marketers, pipelines, power generators, utilities and producers of natural gas. The Company provides multi-year, multi-cycle storage services to its customers under long-term firm( LTF) contracts. Under its LTF contracts the Company's customers are obligated to pay them monthly reservation fees in exchange for the right to inject, store and withdraw volumes of natural gas on days and for periods selected by them at injection or withdrawal rates up to maximums specified in the contract.
Under its LTF contracts its customers are obligated to pay the Company monthly reservation fees in exchange for the right to inject, store and withdraw volumes of natural gas on days and for periods selected by them at injection or withdrawal rates up to maximums specified in the contract. Under an STF contract, a customer pays a fixed fee to inject a specified quantity of natural gas on a specified date or dates and to store that gas in its storage facilities until withdrawal on a specified future date or dates. Its portfolio of third-party customers consists of a strategic mix of customer types, each of which tends to have a storage usage pattern that is different from those of other customers at the facility. The Company purchases, stores and sells natural gas for its own account in order to utilize, storage capacity and injection and withdrawal capacity that is not contracted to customers; contracted to customers, but underutilized by them, and available only on a short-term basis.
AECO Hub consists of two facilities in Alberta, Suffield and Countess, which are 75 miles apart but operate as one hub. Due to its injection and withdrawal capacity (2.8 billion cubic feet per day and 3.1 billion cubic feet per day, respectively), AECO Hub supports high cycling customer contracts. AECO Hub is a natural gas storage provider in western Canada and the independent storage hub in North America, based on its analysis of working gas capacity owned by other storage owners, adjusted according to each such owner's percentage ownership of its respective storage facilities. Its location on TransCanada Pipeline's Alberta System with direct access to abundant western Canadian natural gas supply and pipeline connections to United States and Canadian natural gas markets provides its customers with flexibility and liquidity. AECO Hub is located in the Western Canadian Sedimentary Basin (WCSB), which is the hydrocarbon basin in Canada and one of the important natural gas producing regions in North America.
AECO Hub is connected to the Alberta System. AECO Hub is commonly referenced pricing point for Canadian natural gas, and the price of natural gas in Alberta is often referred to as the AECO Price. AECO Suffield and AECO Countess, the two facilities that make up the AECO Hub, are geographically separated, but the toll design of the Alberta System means that they are both commercially located at the same point. AECO Suffield is located in southeastern Alberta. It is near the Alberta System's eastern gate, the natural gas delivery point in Canada, where gas is delivered into TransCanada's mainline pipeline system (transporting natural gas to eastern Canada and the northeastern United States) and the Foothills/Northern Border pipeline system (transporting natural gas to Chicago and the Midwestern United States). AECO Suffield consists of 60 storage wells and five storage reservoirs with aggregate effective working capacity of approximately 83.5 billion cubic feet. The storage reservoirs are connected to a central processing and compression facility by a system of five pipelines. Compression is provided by natural gas powered engines that have a total of more than 36,000 horsepower. All of the processing and compression facilities and substantially all of the well sites for the storage reservoirs are located on the Canadian Forces Base, Suffield military training range, or CFB Suffield. CFB Suffield is open prairie land, which provides relatively low costs for seismic surveys, drilling and pipelining.
AECO Countess is located in south central Alberta, approximately 60 miles east of Calgary. Countess is connected to a diameter pipe of the Alberta System. This modern natural gas storage project consists of 29 storage wells and two high performance gas storage reservoirs that are connected to a central processing and compression facility. The two storage reservoirs each have their own gathering pipeline system. Compression is electrically powered and totals approximately 34,500 horsepower. The two reservoirs have total effective working capacity of approximately 70.5 billion cubic feet.
The Company’s Wild Goose storage facility is located 55 miles north of Sacramento, California. Wild Goose is a high deliverability, multi-cycle, or HDMC storage facility. This HDMC capability is made possible by the rock of the Wild Goose reservoirs and the use of horizontal well technology. Wild Goose is strategically located in a highly-liquid hub market and is one of only four independent operating storage facilities in northern California. Wild Goose provides natural gas receipt and delivery services at Pacific Gas & Electric Company (PG&E) ( PG&E Citygate), a liquid trading point where natural gas supply from multiple upstream basins meets the volatile California end-use gas demands that create a dependence on natural gas storage. This location provides customers with the opportunity to take advantage of PG&E Citygate pricing, liquidity and arbitrage opportunities.
Wild Goose operates 17 natural gas storage wells that are completed in three depleted natural gas reservoirs with an effective working capacity of 50 billion cubic feet and a gas generated compression of 27,900 horsepower. The Wild Goose reservoirs are located in rock formations. In addition, the reservoirs have a water drive mechanism, which helps maintain reservoir pressure and well deliverability. Rights to use the reservoirs at Wild Goose for natural gas storage are held pursuant to a series of natural gas storage leases with the surface owners of the lands where the reservoirs are situated as well as mineral owner agreements and similar instruments entered into with the holders of subsurface mineral interests in such lands. Rights for the lands used for the pipelines are derived from right-of-ways, easements, leases, and other similar land-use agreements.
The Company’s Salt Plains storage facility is located 110 miles north of Oklahoma City, Oklahoma, in a region of growing demand for natural gas as a fuel for heating and power generation. Salt Plains provides intrastate services in Oklahoma through its connection to pipelines operated by ONEOK Gas Transportation Pipelines, L.L.C., (ONEOK), and intrastate and interstate services through its interconnect with pipelines operated by Southern Star Central Gas Pipeline, Inc., or Southern Star. Salt Plains is in a strategic mid-continent location with interconnects to pipelines owned by Southern Star and ONEOK, which serves both regional and mid-continent natural gas markets. This provides customers the benefits of liquidity, supply, and arbitrage opportunities. In addition, natural gas produced in the Rocky Mountains that is delivered to the mid-continent region gets redistributed to various pipelines such as Southern Star that have access to Salt Plains.
Salt Plains operates 30 gas storage wells and a gas generated compression of 10,000 horsepower that are completed in a depleted natural gas storage reservoir characterized by rock. The wells are connected to a central plant facility by seven miles of pipeline. Rights to use the reservoir at Salt Plains for natural gas storage are held pursuant to a series of gas storage agreements with the mineral rights owners of the lands where the reservoir is situated. Rights for the lands used for the pipelines are derived under these gas storage agreements as well as from right-of-way grants from other land owners.
NGPL Contracted Capacity
The Company’s subsidiary has contracted for 8.5 billion cubic feet of gas storage capacity on the MidCon leg and the TexOk leg of the NGPL pipeline system in the mid-continent. The NGPL system connects and balances Gulf Coast and mid-continent supply basins with Chicago and other Midwestern United States end-use markets. NGPL has a number of different storage facilities on its pipeline system and manages its storage capacity as pools on separate legs of the pipeline. Under NGPL's FERC-approved tariff, NGPL is limited to charging cost-of-service rates for its transportation and storage services.
Access Gas Services
The Company’s natural gas marketing business in Eastern Canada, British Columbia and Alberta serves commercial, industrial and retail customers. This is also a margin business where supply is locked in to serve customers at committed prices. In Eastern Canada, it also provides fee-based agency services to natural gas end-users. The Access marketing business is an extension of the Company's optimization activities.
The Company competes with TransCanada (Edson, CrossAlta), Atco (Carbon), Enstor (Alberta Hub), Buckeye Partners (Lodi), PG&E, NW Natural (Gill Ranch) and Central Valley Gas.
Niska Gas Storage Partners LLC
Suite 2500, 1001 Fannin Street
HOUSTON TX 77002