Inergy, L.P.(NYSE:NRGY) (“Inergy”) announced today that its wholly owned subsidiary, Inergy Midstream, LLC, has executed a definitive agreement to purchase Tres Palacios Gas Storage LLC, the owner of the Tres Palacios natural gas storage facility, for $725 million plus reimbursement of certain capital expenditures and subject to customary net working capital adjustments. Located in Matagorda County, Texas, Tres Palacios is a high deliverability, salt dome natural gas storage facility with approximately 38.4 Bcf of working gas capacity including 27.1 Bcf of current working gas capacity (Caverns 1 and 2) and 11.4 Bcf of incremental working gas capacity scheduled to be placed in service in the fourth calendar quarter of 2010 (Cavern 3). The facility is expandable by an additional 9.5 Bcf of working gas capacity which Inergy expects to place in service by or before 2014 (Cavern 4). Located approximately 100 miles southwest of Houston, Tres Palacios is currently connected to a total of ten intrastate and interstate pipelines via a 40 mile, 24” dual-pipe, looped header system offering connectivity to multiple demand markets including the Houston and San Antonio metropolitan areas and the broader Texas markets as well as markets in the Northeast, Midwest, Southeast, and Mid-Atlantic United States and Mexico. Tres Palacios offers customers greater than six-turn gas storage capability with maximum withdrawal capacity of 2.5 Bcf/day and maximum injection capacity of 1 Bcf/day.
“Inergy is very pleased to announce the acquisition of another premier midstream storage platform. The facility adds to Inergy’s portfolio of valuable natural gas storage assets and provides the partnership with an additional platform for growth,” said John Sherman, President and CEO of Inergy, L.P. “In addition to the specific capacity expansion plans at Tres Palacios, we expect to pursue a number of additional development opportunities around this asset with advantaged economics similar to our strategy and successful expansion efforts around our initial Stagecoach storage facility investment in the Northeast.”