SOUTHERN CALIFORNIA GAS COMPANY

STORAGE EXPANSION STUDY

DECEMBER 21, 2011

TABLE OF CONTENTS Page Introduction ....................................................................................................................1 The SoCalGas Storage System ......................................................................................1 Key Study Assumptions & Parameters ..........................................................................4 Expansion Analyses .......................................................................................................5 Third-Party Technical Review .......................................................................................5

Storage ...................................................................................................... STO-1

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INTRODUCTION Pursuant to Decision (D.) 07-12-019, the Southern California Gas Company ("SoCalGas") hereby submits the following report examining incremental increases in storage capacity on its gas transmission system.1 D.07-12-019, issued on December 6, 2007, adopted the proposal of SoCalGas, San Diego Gas & Electric (“SDG&E”), and Southern California Edison that SoCalGas and SDG&E will perform certain system expansion studies. (D.07-12-019, mimeo., at 92.) The testimony regarding these studies provided as follows:

“Within one year after CPUC approval of the Agreement, and then at least once every three years thereafter, SoCalGas and SDG&E will develop a system expansion study of the SoCalGas and SDG&E interconnect points, backbone system, and storage facilities. The results of these studies will be public, as will key study assumptions, including reliability parameters, but SoCalGas and SDG&E will be able to keep portions of these studies confidential for security reasons. These studies will: (1) address various increments of expansion at each interconnect point on the integrated SoCalGas and SDG&E backbone system, including required system expansions to accommodate an interconnect point expansion (2) address various increments of storage inventory, injection, and withdrawal capacity expansion, including required system expansions to accommodate a storage capacity expansion, and (3) provide data sufficient for any interested party to confirm the reasonableness of the projected costs for all studied expansions. Each study will be reviewed and commented on by a qualified independent third party selected by SoCalGas and SDG&E and approved by the Commission’s Energy Division through an advice letter. SoCalGas and SDG&E will recover from customers all reasonable costs related to performing these studies and having the studies reviewed by an independent third party. Interested parties will have the ability to comment on and challenge these studies, including key study assumptions and reliability parameters.” Prepared Direct Testimony of Richard Morrow, A.06-08-026, Appendix A, Exhibit B.

In compliance with this order, SoCalGas examined two levels of expansion for each of its storage products (inventory, injection, and withdrawal) for this report. THE SOCALGAS STORAGE SYSTEM SoCalGas’ four storage fields – Aliso Canyon, Honor Rancho, La Goleta, and Playa del Rey – are located near the primary load centers of the SoCalGas system. Together they have a combined inventory capacity of 134.1 billion cubic feet (Bcf), a combined firm injection capacity of 850 MMcfd, and a combined firm withdrawal capacity of 3,195 MMcfd.

1 SoCalGas and SDG&E previously submitted a Receipt Point Expansion Study on December 8, 2011.

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A map of the SoCalGas transmission system that shows the location of these storage fields is shown in Figure 1.

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Figure 1 – SoCalGas Transmission System

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KEY STUDY ASSUMPTIONS & PARAMETERS The following items comprise the key study assumptions and parameters used for this evaluation. All existing facilities were made available for the analyses. SoCalGas performs its evaluations assuming all existing facilities are available for use and perform as designed. Two expansion volumes were examined for each storage product. For each storage product, SoCalGas has identified two expansion volumes that represent a modest and moderate expansion of the three storage products. Consistent with past studies, all evaluations of expansion are on a “stand alone” basis, and the study results for single products cannot be used to estimate the system improvements or costs needed for the simultaneous expansion of multiple products. Simultaneous expansions of multiple storage products were not examined. All evaluations of expansion are on a “stand alone” basis, and the study results for single product cannot be used to estimate the system improvements or costs needed for the simultaneous expansion of multiple products. The Commission Order did not require the evaluation of simultaneous expansions, and given the number of combinations and permutations that are possible, such an evaluation would be burdensome. However, SoCalGas will examine any combination of simultaneous expansion requested, at the requestor’s expense. Cost estimates presented herein are preliminary in nature. SoCalGas has prepared preliminary cost estimates for all system improvements identified in these studies, and have provided sufficient detail regarding these estimates in compliance with the Commission Order. However, SoCalGas has no plans at this time to proceed with any construction, and therefore have not performed a detailed engineering site or route evaluation in the development of these estimates, which take considerable time and expense. Costs which would be estimated as part of a detailed engineering construction estimate and which could be significant, such as those associated with permitting, paving, right-of-way, environmental, gas quality, measurement, regulatory, and land acquisition/development issues; and any unusual construction costs or facility requirements (e.g. freeway, river, or channel crossings) are unique for each project. SoCalGas has no “rule of thumb” that could be applied for these costs, and so they are explicitly excluded from these preliminary cost estimates. SoCalGas will perform a detailed engineering construction estimate for any expansion scenario presented herein, at the requestor’s expense, which will include these costs.

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EXPANSION ANALYSES The following section presents the results of SoCalGas’ storage expansion analyses, the detailed cost estimate, and the technical review performed by GL Nobel Denton (formerly Advantica Inc.). Since the 2008 report, the 6 Bcf storage inventory expansion at the Honor Rancho Storage Field is nearing completion, and an additional 6 Bcf of expansion could provide future storage inventory expansion. Per D.07-12-019, SoCalGas is permitted to leverage past studies and analyses in the preparation of this expansion report2. Accordingly, since no other storage expansions have occurred, SoCalGas has simply reviewed and updated cost estimates as necessary3. THIRD-PARTY TECHNICAL REVIEW SoCalGas had selected Advantica (now GL Nobel Denton) as the qualified independent third party to review its storage expansion studies. SoCalGas sought approval of its selection in Advice Letter 3842. The Advice Letter was approved by the Commission in April 2008. GL Nobel Denton is a global engineering consultancy, supporting clients in the gas, oil, water and electric industries. With more than 30 years of experience in the energy sector, GL Nobel Denton has a proven track record of providing products, services and consultancy to more than 550 clients in over 60 countries across the globe.

2 “To the extent possible, SoCalGas and SDG&E will utilize the results of previous assessments to help reduce the costs and resources requirements for these studies.”, Prepared Direct Testimony of Thanathep E. Trinooson, page 4, A.06-08-026; and “We accordingly approve Applicants proposal to develop a system expansion study of the SoCalGas/SDG&E interconnect points, backbone system, and storage facilities.”, D07-12-019, page 95. 3 Costs were updated for the Aliso Canyon Storage Expansion based on the 2009 CPUC Application (A.09-09-020).

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Storage Aliso Canyon Injection Expansion Storage injection expansion will be accomplished through replacement of the existing turbine driven compressors. These compressors are original equipment in the field. As experience has been gained in operating the field it has become apparent that the field could be better utilized if injection capacity is increased. The criteria used to assess the compression requirements have been determined by field capacity, pipeline supplies and regulatory requirements. The criteria are:

Injected gas 80 billion scf during a 210 day season 550 psig suction pressure 450 MMscf/d end of season at 3200 psig discharge pressure Centrifugal compression driven by electric motors

Determined by the equipment available in the market the preferred option is a three unit electric motor system. This system provides flexibility to inject higher than the design rate early in the season when the discharge pressure is below 1800 psig and the units can perform in a parallel mode. Above that pressure the units will perform in series which traditionally meant two units feeding one. The need to transition from parallel to series operations implies added flexibility for the system. The estimated EPC costs for this option are in the following table.

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COSTS FROM APPLICATION A.09-09-020, APPENDIX A, P. 32

3 NEW ELECTRIC DRIVEN COMPRESSORS

Description

Current Site 300 MMCFD

PRELIMINARY/ENGINEERING/PERMITTING $3.3 MILLION

ENGINEERING, PROCUREMENT AND CONSTRUCTION (EPC)

ENGINEERING $13.1 MILLION

PROCUREMENT $58.9 MILLION

CONSTRUCTION

LABOR $36.7 MILLION

MATERIALS $18.9 MILLION

RELATED FEES

$36.3 MILLION

SCEDISON ONE TIME COST $7 MILLION

PLANT POWER LINE DESIGN AND INSTALLATION $3.2 MILLION

SOCAL GAS OVERHEAD $0.9 MILLION

REPLACE OFFICE TRAILERS $0.5 MILLION

OTHER

$0.4 MILLION

AFUDC $21.7 MILLION GRAND TOTAL $200.9 MILLION

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Honor Rancho Injection Expansion Injection expansion at Honor Rancho was projected based on the existing horsepower and capacity and factoring a cost per horsepower to those criteria. The advantage of an Honor Rancho expansion is that no additional gas transmission lines are required. The preliminary proposal is for 6400 horsepower of booster compression that will be used as a first stage to the existing compressors. Using a factor of $3535 for installed horsepower this results in an estimate of $22.7 million for this expansion. Ongoing 6 Bcf Inventory Expansion In 2009, SoCalGas filed an application for expansion of the storage inventory capacity at the Honor Rancho Storage Field from 23 Bcf to 28 Bcf. The additional inventory will be achieved through removing brine water at the lower sections of the reservoir thereby creating additional volume for gas storage. The CPUC approved the Application in D.10-04-034 and the expansion project is currently in progress. Additionally, 1 Bcf of expansion will be provided by compressor system upgrades to allow higher compressor discharge pressure. Future 6 Bcf Storage Inventory Expansion Based on the field’s production history, the field is bounded and resembles a pressure depletion drive with a limited water leg. Liquid removal through storage cycling throughout the years has increased the voidage in the reservoir but normal storage cycling will not provide the necessary expansion in a timely manner. Liquid production wells will be drilled and produced from the area between the original oil/water contact and the current gas storage downdip limit to expedite expansion. The estimated fluid removal to add 1 Bcf of inventory expansion is 1.253 million stock tank barrels. The expected fluid removed will be primarily water since the reservoir was depleted prior to storage activities. Horizontal wells with a 1000’ to 1500’ reach will be drilled providing an estimated production rate of 1500 barrels per day. The required number of production wells will be complemented by the same number of water injection wells to dispose of all produced water. The water will be injected into the shallow Pico zone that is currently used for water injection. The facility requirements resulting in an additional 6 Bcf of storage inventory expansion will require three additional production wells and three additional injection wells. 6 Bcf of additional inventory will be accomplished by liquid removal to create 6 Bcf of working inventory as well as an additional 2.75 Bcf of cushion gas to support the total working pressure. The liquid withdrawal is estimated at 11 million barrels to increase reservoir capacity by 8.75 Bcf. Three horizontal liquid production wells will generate approximately 4500 barrels of liquid per day. An additional three injection wells will be required to reinject

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produced water into the injection zone. The estimated expansion timeline for the 8.75 Bcf expansion is just over 1 Bcf each year due to liquid production. The estimated time to expand the field by 8.75 Bcf resulting in 6 Bcf of working inventory is 6.7 years The estimated liquid withdrawal rates used in this study are the same as those used in the 2008 Omnibus Study for 14 Bcf storage expansion and 7 Bcf storage expansion. The Advantica audit from the 2008 Omnibus Study confirms the estimated liquid withdrawal rates and production/injection well requirements and therefore, no additional audits are necessary. Estimated Costs:

3 Production wells - $14.8 million each = $44.5 million 3 Injection wells - $5.8 million each = $17.3 million Production piping and valves = $3.8 million Disposal piping and valves = $3.8 million Roads, grading electrical = $1.9 million Separation = $0.3 million Oil stabilization = $2.8 million Brine treatment = $5.2 million Cushion gas $5.00/Mcf 2.75 Bcf = $13.75 million Total cost = $93.4 million

No additional storage inventory expansion scenarios at our existing storage fields appear to be feasible at this time. Honor Rancho Withdrawal Expansion Withdrawal expansion at Honor Rancho storage field is based on historical deliverability rates from the field gas withdrawal data. An inventory of 5 Bcf was used to determine the low inventory average withdrawal rates from the gas withdrawal wells in the field. The average per well withdrawal rate was determined to be 37 - 38 MMcfd. Facility upgrades will be necessary to accommodate the increased withdrawal capacity. Two scenarios were developed including well requirements, facility upgrades and associated costs. 150 MMcfd Withdrawal

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Four gas storage withdrawal wells are required to provide the 150 MMcfd withdrawal expansion based on the information above. Dehydration upgrades as well as piping and supporting facility installations are necessary to support the four wells. Estimated Costs:

4 gas withdrawal wells - $7.6million each = $30.5 million Production piping and valves, roads, electrical = $7.9 million Dehydration/separation = $9.1 million Total cost = $47.5 million

250 MMcfd Withdrawal Seven gas storage withdrawal wells are required to provide the 250 MMcfd withdrawal expansion based on the information above. Dehydration upgrades as well as piping and supporting facility installations are necessary to support the seven wells. Estimated Costs:

7 gas withdrawal wells - $7.6 million each = $53.4 million Production piping and valves, roads, electrical = $12.6 million Dehydration/separation = $10.1 million Total cost = $76.1 million

The expansion of withdrawal capacity at the Honor Rancho storage field also requires improvements made to the gas transmission system. The current withdrawal capacity at Honor Rancho is 1000 MMcfd. Transmission Improvements for Expansion of 150 MMcfd (1150 MMcfd total) withdrawal capacity: $ 44 million

1. Install 7 miles of 36-inch diameter pipeline from Honor Rancho storage field to Quigley Pressure Limiting Station (PLS), $ 41 million

2. Replace Quigley PLS, $ 3 million Refer to Figure STO-WDEXP for the location of these facility improvements. Expansion of 150 MMcfd at Honor Rancho storage field causes MAOP violations along Line 225 and others in the San Joaquin Valley when the Wheeler Ridge Zone is fully utilized at 765 MMcfd. To resolve this violation, a new 7-mile 36-inch diameter pipeline

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is required between Honor Rancho storage field and Quigley PLS. Installation of this new pipeline allows for the increased throughput from Honor Rancho storage field and the existing throughput of the Wheeler Ridge zone. Simulations also show that flows at Quigley Station exceed that of the current rated flow capacity. To resolve this violation, a rebuild of Quigley Station is required to allow increased flow rates. Transmission Improvements for Expansion of 250 MMcfd (1250 MMcfd total) withdrawal capacity: $ 44 million Analysis results show that the facility improvements identified for the 150 MMcfd expansion are adequate for the 250 MMcfd expansion. The same 7-mile 36-inch pipeline is required for this level of expansion. Likewise, Quigley PLS must be rebuilt, although for higher flow rates. No further improvements are necessary.

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Figure STO-WDEXP

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Unit Total

Expansion of 150 & 250 MMcfd

Engineering / design $2,640,000Typical permitting $1,100,000Material

compressors36" pipe 7 mi $192 $9,229,241Other $1,000,000

subtotal $10,229,241Construction

Compressor installationPipe installation 7 mi $28,030,759Station work $2,000,000

subtotal $30,030,759

Total $44,000,000

Honor Rancho Storage Field Withdrawal

Cost

Transmission Expansions

Omnibus – Storage Expansion Projects

ADVANTICA AUDIT

Project Sempra_HC0829

Date: October 8, 2008

Omnibus – Storage Expansion Projects ADVANTICA AUDIT

1.0 Introduction The system expansion at Honor Rancho Storage field needs to be reviewed by a third party in order to be in compliance with the Omnibus Expansion Study Agreement. Advantica proposes to provide this review for the Honor Rancho and Aliso Canyon field. As Advantica understands the expansion plans for Honor Rancho and Aliso Canyon, there are three parts to the system expansion. The three parts to be audited are:

1. Injection of Gas - MMcfd 2. Storage Inventory Expansion - BCF 3. Withdrawal of Gas – MMcfd

The expansion of gas injection in Part 1 will only involve additional compression for the high flow rates at Honor Rancho and Aliso Canyon. The expansion for Part 2 will involve the disposal of produced water. In Part 2 (expansion of Inventory Volume), a water/oil mixture will be removed to create an available volume in the formation for gas injection and the produced water (brine) will require disposal in deep deposal wells. Part 3 (withdrawal of Gas) will require additional gas withdrawal wells will be required.

2.0 Expansion of Injection Capacity 2.1 150 MMcfd at Aliso Canyon

2.1.1 SoCalGas Energy Plan:

Injection: Additional compressor unit with 16,700 hp capable of compressing 450 MMcfd (vs. current 300 MMcfd).

Basis: SoCalGas March 2008 estimate for 450 MMcfd is 50,000 hp. The additional 150 MMcfd should need approximately one-third of the estimated 50,000 hp

2.1.2 Advantica Conclusions:

After reviewing the base data and design parameters for Aliso Canyon compressor, Advantica has determined that the brake horsepower for the two conditions are:

ALISO CANYON

Formula SPS Model Formula SPS Model

INJECTION ‐ CASE 1

Solar Titan 130 43,000 hp 42,300 hp 25,800 hp 26,300 hp

INJECTION ‐ CASE 2

Siemens SGT‐400 43,000 hp 41,700 hp 25,800 hp

CONDITION 1 ‐ High Pressure

450 mmscfd at 550 to 3400 psig 

CONDITION 2 ‐ Low Pressure

600 mmscfd at 550 to 1250 psig 

TABLE 2.1.2

The increase in brake horsepower is for the compressor inlet shaft and not

the driver output. For the increase in flow rate of 50% (300 MMcfd to 450 MMcfd), the portion associated with the increase is 14,500 hp. This is a 15% difference between Advantica and SoCalGas calculations which is within standard practice for preliminary equipment sizing. The difference in Advantica value and SoCalGas value is probably due to the selected value for compressibility (Zs) of the gas in the compressor calculation at pressures greater than 1000 psig. For typical values of compressibility (Zs), please see TABLE 2.1.2.A.

The compression ratio exceeds 1.8 at Aliso Canyon for both low and high

pressure conditions; therefore, interstage cooling of the gas may be required.

CONDITION 1 – 500 to 1250 psig CONDITION 2 – 550 to 3400 psig

TABLE 2.1.2.A 2.2 50 MMcfd at Honor Rancho: 2.2.1 SoCalGas Energy Plan

Injection (Based on SoCalGas April 2008 estimate): Booster unit with 6,400 hp capable of compressing 300 MMcfd (vs. current 250 MMcfd) and providing higher suction pressure to the five existing compressors.

Z = 0.83

Z = 0.94

2.2.2 Advantica Conclusions: After reviewing the base data and design parameters for Honor Rancho booster compressor, Advantica has determined that the brake horsepower for the design conditions (300 MMcfd at 500 to 850 psig) are:

HONOR RANCHO

Formula SPS Model Formula SPS Model

INJECTION

BOOSTER 6550 hp 6,500 hp 5,040 hp 4,800 hp

300 mmscfd at 550 to 850 psig  300 mmscfd at 850 to 3600 psig 

NEW BOOSTER ‐ Q = 300 mmcsfd 5 Parallel Units = Q = 50 mmscfd ea.

TABLE 2.2.2

The brake horsepower is for the booster compressor inlet shaft and not the driver output. This value is agreement with SoCalGas calculations which is within standard practice for preliminary equipment sizing. The existing five units will have adequate horsepower for the 300 MMcfd.

The compression ratio exceeds 1.8 in the existing units and interstage

cooling may be required. The Stoner Pipeline Simulator (SPS) is an advanced transient hydraulic simulation application that simulates flow of gas through compressors, pipelines and other gas equipment. SPS can simulate any existing or proposed pipeline configurations, compressors, and other equipment. The compressor calculations are based on compressor efficiency, gas properties, pressure, temperature, and gas compressibility. SPS/Simulator calculates equipment performance (compressor horsepower) and other pipeline variables such as flow, pressure, density and temperature throughout the pipeline network. Equipment and pipeline parameters are displayed interactively as the simulation progresses, either in tabular reports or graphically, over time or distance. SPS was used to determine the required horsepower for the compressor units at Honor Rancho and Aliso Canyon along with manual hand calculations as shown in Figure 1.

FIGURE 1 Manual Calculation Reference

3.0 Expansion of Inventory Capacity

HONOR RANCHO - HISTORICAL DATA Daily Oil and Water Production

January 2002 - May 2007

Date Oil (Bbls) Water (Bbls) COMBINED MIX(Bbls)

MAXIMUM 1406 2698 2993 AVERAGE 201 540 741 STD DEVIATION 175 412 500

ADVANTICA WATER 75.00% 2023

AUDIT MIX 66.67% 1995

FIGURE 2

HONOR RANCHO – HISTORICAL DATA for Production of OIL/BRINE

The historical data from January 2002 to May 2008 was used to determine the maximum oil, Water (Brine) and mixture production rates for the Honor Rancho storage field. This historical data was for the existing vertical oil/brine wells (all W1, W2, and D type wells) which will still be used to help create the required volume in the formation. The additional wells will be horizontal wells with an production rate of 1,500 bpd. In this audit, Advantica allowed the existing vertical wells to continue to operation at a rate equal to 75% of maximum water (brine) production or 67% of mixture production: i.e. 2000 bpd for ALL existing vertical wells (W1, W2, and D).

3.1 14 Bcf at Honor Rancho:

3.1.1 SoCalGas Energy Plan: Inventory (Based on SoCalGas estimate of Jan. 2008 & April 2008 revision): Increase liquid production to create additional inventory space. New oil/water production wells (6) New oil/water disposal wells (6)

3.1.2 Advantica Conclusions: After reviewing the oil/brine production well history from January 2002 to May 2008 (Figure 2), Advantica recommends that 6 new horizontal production wells be added to Honor Rancho. Advantica used a value (2000 bpd) equal to about 75% of the historical maximum water production for the existing vertical wells at Honor Rancho. The target production rate of 1500 bpd of oil/brine mix for each horizontal well is acceptable. Please see Table 3.1.2 below:

HONOR RANCHO - INVENTORY 14 bcf

10000 bbl (MIX)

10000 bbl (Brine)

7000 bbl (Brine)

3000 bbl (Oil)

0 bbl (Oil)

1000 BPD VERTICALS Existing 2000

1500 BPD  HORIZONTALS NEW wells 8000 COUNT = 5.3

NEW = 6

1500 BPD  10000 bbl (Brine)

1 Existing 1 1500

New Disposal 6 9000

10500

per DISPOSAL WELL

MAX BRINE + MIN OIL

MIN BRINE + MAX OIL

OIL/BRINE Production

MAX Brine Production

MIN Brine Production

MAX OIL Production

MIXTURE is either:

75% ‐ Historical Maximum

Worst case for Production is 10,000 bbl (MIX)

1 disposal well =

Worst case is MAX Brine (100% Brine) for Disposal

MIN OIL Production

TABLE 3.1.2

3.2 7 Bcf at Honor Rancho 3.2.1 SoCalGas Energy Plan:

Inventory (Developed from the 14 Bcf INV case above & April 2008 revision): Increase liquid production to create additional inventory space. New oil/water production wells (3) New oil/water disposal wells (3)

3.2.2 Advantica Conclusions:

After reviewing the oil/brine production well history from January 2002 to May 2008 (Figure 2), Advantica recommends that 3 new horizontal production wells be added to Honor Rancho. Advantica used a value (2000 bpd) equal to about 75% of the historical maximum water production for the existing vertical wells at Honor Rancho. The target production rate of 1500 bpd of oil/brine mix for each new horizontal well is acceptable. Please see Table 3.2.2 below:

7 bcf

6500 bbl (MIX)

6500 bbl (Brine)

4500 bbl (Brine)

2000 bbl (Oil)

0 bbl (Oil)

1000 BPD VERTICALS Existing 2000

1500 BPD  HORIZONTALS NEW wells 4500 COUNT = 3.0

NEW = 3

1500 BPD  6500 bbl (Brine)

1 Existing 1 1500

New Disposal 3 4500

6000

MAX BRINE + MIN OIL

MIN BRINE + MAX OIL

OIL/BRINE Production

MAX Brine Production

MIN Brine Production

MAX OIL Production

MIN OIL Production

per DISPOSAL WELL

HONOR RANCHO - INVENTORY

MIXTURE is either:

75% ‐ Historical Maximum

1 disposal well =

Worst case is MAX Brine (100% Brine) for Disposal

Worst case for Production is 6,500 bbl (MIX)

TABLE 3.2.2

4.0 Expansion of Withdrawal Capacity 4.1 250 MMcfd at Honor Rancho:

4.1.1 SoCalGas Energy Plan Withdrawal (Based on SoCalGas’s Jan. 2008 estimate): New gas wells (7) 4.1.2 Advantica Conclusions

After reviewing the gas withdrawal report for five normal production days and the withdrawal data for a storage field inventory at 5 Bcf, Advantica recommends that 7 new gas wells be added to Honor Rancho. The target production rate of an additional 250 MMcfd will required 7 wells with average gas flow rate 37-38 MMcfd per well. This will match the historical data reviewed. Please see Table 4.1.2 for details:

250 mmscfd ADVANTICA

37.04 mmscfd CONCLUSION

6.75 wells 7 wells

37.46 mmscfd

6.68 wells 7 wells5 Separate 

Day Average

5 BCF DAY

HONOR RANCHO - WITHDRAWAL

Assume TOP WELLS Produce

NEW WITHDRAWAL WELLS

Assume TOP WELLS Produce

NEW WITHDRAWAL WELLS

TABLE 4.1.2

4.2 150 MMcfd at Honor Rancho:

4.2.1 SoCalGas Energy Plan

Withdrawal (Based on SoCalGas’s Jan. 2008 estimate): New gas wells (4) 4.2.2 Advantica Conclusions

After reviewing the gas withdrawal report for five normal production days and the withdrawal data for a storage field inventory at 5 Bcf, Advantica recommends that 4 new gas wells be added to Honor Rancho. The target production rate of an additional 150 MMcfd will required 4 wells with average gas flow rate 37-38 MMcfd per well. This will match the historical data reviewed. Please see Table 4.2.2 for details:

150 mmscfd ADVANTICA

37.04 mmscfd CONCLUSION

4.05 wells 4 wells

37.46 mmscfd

4.01 wells 4 wells

5 BCF DAY

5 Separate 

Day Average

Assume TOP WELLS Produce

NEW WITHDRAWAL WELLS

Assume TOP WELLS Produce

NEW WITHDRAWAL WELLS

HONOR RANCHO - WITHDRAWAL

TABLE 4.2.2

FINAL REPORT

THE SOUTHERN CALIFORNIA GAS COMPANY EXPANSION SCENARIO REVIEW

HONOR RANCHO WITHDRAWAL SYSTEM

May 29, 2008

© 2007 Advantica, Inc.

This report is written in fulfillment of an agreement between The Southern California Gas Company (SoCal) and Advantica, Inc. SoCal has contracted with Advantica to review supplied expansion scenario models. As stated in the Proposal, each scenario will be examined for the following:

Connectivity check limited to orphan pipes and unconnected sections

1. Connectivity check limited to orphan pipes and unconnected sections 

2. Unknown structure issues 

3. Control and constraint issues (not including set point values) 

4. Issues related to sonic flow, minimum pressures, and high velocities 

If any other issues are subsequently found while searching for items above, they will be noted as well. This report will address findings regarding the “Honor Rancho Withdrawal” group of models. Along with corresponding results data, the following models were received: 1) 1810_BASE pd/xy; 2) HR_1150 pd/xy; 3) HR_1150_NORTH pd/xy; 4) HR_1150_SOUTH pd/xy 5) HR_1150_WHLR pd/xy; 6) HR_1250 pd/xy; 7) HR_1250_NORTH pd/xy; 8) HR_1250_SOUTH pd/xy; 9) HR_1250_WHLR pd/xy

Connectivity check: A connectivity check, which entailed searching for orphan pipes and disconnected subsystems, was performed. For each of the models submitted, no disconnections were discovered. All systems modeled are tied together as one unit.

Unknown structure issues: No unknown structure messages were generated upon import of the models. A closer inspection of the nodes and facilities did not uncover any structure issues, either.

Control and constraint issues: No constraint or control error messages were generated upon import of the models. However, a detailed inspection of the control setups revealed that several compressors were set up with DEFAULT as the Compressor Operation Switch (DCONTROL and SCONTROL are the other options). DEFAULT is not a recommended setting as it does not provide a clear indicator for which node is the controlling. It introduces the possibility of error under certain Constraint Interchange conditions. For a compressor station that is on discharge control, Advantica recommends using DCONTROL instead. The following compressor station is currently set on DEFAULT:

From-node name To-node name

MHPS MHPD

MCBS MCBD

MCLS MCLD

MSOS MSOD

Issues related to sonic flow, minimum pressures, and high velocities: After a steady-state balance, several exceptionally high velocities were noted. The validity of these values should be verified. Note that the velocity values and pipes affected can vary

depending upon which of the 9 models is imported. Below is a sample list of affected pipes from model 1810_BASE.

Name From-node To-node Velocity Diameter Length P From P To

EQ000497 SC1 MCBS 802.9 5.000 4.000 507.37 455.53

EQ000493 SC1 MCLS 642.6 4.000 4.000 507.37 464.54

EQ000498 MCBD SC3 628.1 5.000 4.000 614.68 573.43

EQ000499 SC1 MHPS -544.0 4.000 4.000 507.37 541.44

EQ000495 SC1 MSOS -544.0 4.000 4.000 507.37 541.44

EQ000494 MCLD SC3 512.7 4.000 4.000 608.00 573.43

EQ000500 MHPD SC3 -507.9 4.000 4.000 541.49 573.43

EQ000496 MSOD SC3 -507.9 4.000 4.000 541.49 573.43

Some additional warning messages were encountered after balancing in the steady-state, however the messages were benign. Furthermore, the messages are negated due to the fact that all models undergo “transient initialization” through Procedures and an initialization run period to align the model with known system conditions. All USM models are monitored during the course of the run and manually altered to address any warning conditions. All USM generated messages encountered were benign or addressed through manual intervention during the USM run.

Miscellaneous issues: It was discovered that several pipes are using the FD equation (Fundamental equation with constant friction factor). When used with a valid friction factor, this equation will yield reasonable results. However, the inherent weakness of this equation is the fixed friction factor. As flowing velocities change, so too will the friction factor. If the fixed friction factor differs significantly from the actual friction factor, then a source of error could be introduced. Although the FD equation can yield valid results, Advantica recommends using the FM equation (Fundamental equation with variable friction) for all pipes, due to its adaptability to all flows.

During import, the models generated the following sampling of errors:

*** SAI468 - WARNING - MISSING SUPER KEYWORD FOR COMPRESSOR MCBS MCBD - DEFAULT PARAMETER USED.

*** SAI468 - WARNING - MISSING SUPER KEYWORD FOR COMPRESSOR MCLS MCLD - DEFAULT PARAMETER USED.

The messages above indicate that no supercompressibility equation was indicated for these two compressors. SynerGEE used the default equation instead. The messages are generally not problematic but should be noted in case a different supercompressibility equation is desired.

The Honor Rancho Storage Field system enhancements include 2 mile and 5 mile 36” pipe loops. It should be noted that the internal diameters used in the model are 35” for both pipes. Schedule 40 36” steel has an internal diameter of 35.25” so this very slight difference will have a very small conservative effect on the calculations. Additionally,

the flowing gas temperature for these pipes is 60 deg. F., whereas the remainder of the pipes are 65 deg. F. This will allow a very small calculated increase in linepack for these two pipes compared to the other pipes. The net effect for both of these offsetting data variations should be negligible, however.

Summary: After reviewing the Honor Rancho system models and the output data provided, no significant issues were discovered, only the minor items already mentioned above. All items observed in the models and output data appear reasonable.

Please contact me if you have questions or concerns regarding any of the items in this document.

Sincerely,

Advantica Stoner Software