Natural Gas Storage Field Boundary Extension vs. Production Interests



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Do you produce gas or oil near a gas storage field?  Do you intend to do so? Do you have an operating agreement with the storage field operator?   What if storage field gas migrates into your production field or strata?  What happens if your production operations threaten the integrity of the storage field? 

On August 29, 2012, the Federal Energy Regulatory Commission (?FERC?) approved an interstate natural gas pipeline company?s application to expand the existing boundary and buffer zone of one of its eight natural gas storage fields due to nearby oil production that began to create a pressure sink pulling natural gas from the natural gas storage field.  To protect the integrity of the natural gas storage field, FERC approved the company?s request to expand the storage field?s boundary and buffer zone through the acquisition of 160 acres adjacent to the storage field, and mineral rights in 80 of those acres to serve as a buffer zone.  While these acquisitions may be consensual, the company would be permitted to condemn these interests, if necessary, pursuant to this federal authorization.  

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