Inergy Midstream, L.P. (NYSE:NRGM), a subsidiary of Inergy, L.P. (NYSE:NRGY), yesterday announced plans to jointly market and develop a new interstate natural gas pipeline known as the Commonwealth Pipeline with affiliates of UGI Corporation (“UGI”) and WGL Holdings, Inc. (“WGL”). The proposed 200 mile, 30-inch pipeline is expected to transport at least 800,000 dekatherms per day of natural gas when it is placed into service; and affiliates of UGI and WGL are expected to execute precedent agreements to become anchor shippers on the new pipeline. The parties anticipate placing the new pipeline into service in 2015. The Commonwealth Pipeline will extend from the southern terminus of Inergy Midstream’s MARC I pipeline in Lycoming County, Pennsylvania, through UGI’s utility service areas in central and eastern Pennsylvania to a point of interconnection with WGL’s gas distribution system near Rockville, Maryland. The pipeline will connect attractive demand centers in the Mid-Atlantic region, including Washington D.C., Baltimore, and Philadelphia to abundant and reliable supplies of natural gas production from across Pennsylvania while providing a more cost-effective transportation path versus traditional routes. “We are pleased to be working with UGI and WGL to develop this significant infrastructure project, which will provide direct access to new demand markets for gas producers,” said Bill Moler, Senior Vice President and COO of Inergy Midstream. “Gas production in the Northern tier of Pennsylvania has been limited by the lack of take-away capacity in existing interstate pipelines, most of which currently serves markets in the Northeast. The Commonwealth Pipeline is expected to provide much-needed transportation capacity to desirable new and growing demand markets in the Mid-Atlantic.” John Sherman, President and CEO of Inergy Midstream, added, “This project is a natural extension of Inergy Midstream’s storage and transportation platform in the Northeast. We are committed to developing the critical infrastructure that natural gas customers desire. For our investors, this project adds to our plans for high quality, fee-based cash flows that underpin the stability and growth of our cash earnings.”
The pipeline is expected to cross and interconnect with a number of interstate pipelines along its route, providing customers greater supply diversity while providing producers direct access to expanding markets that are currently served only through legacy interstate pipelines. Upon completion of the MARC I and the Commonwealth Pipeline, shippers will have the ability to move volumes bi-directionally to or from multiple pipelines (including Dominion Transmission, Tennessee Gas Pipeline, Millennium Pipeline, Transco, and TETCO) across an interconnected platform of assets to demand markets in the Northeast and Mid-Atlantic.The sponsors expect to own equal equity interests in the project company formed to own the Commonwealth Pipeline. The plans are for Inergy Midstream to construct and to operate the pipeline, which is expected to cost approximately $1.0 billion and be funded equally among the sponsors. A non-binding open season will be announced in March 2012 for shippers interested in acquiring capacity on the proposed Commonwealth Pipeline. About Inergy Midstream, L.P. Inergy Midstream, L.P., headquartered in Kansas City, Missouri, is a master limited partnership engaged in the development and operation of natural gas and NGL storage and transportation assets. Inergy Midstream owns and operates natural gas storage facilities with aggregate working gas capacity of 41 bcf, natural gas liquids storage facilities with capacity of 1.5 million barrels, and natural gas pipelines with 355 MMcf/d of transportation capacity in New York and Pennsylvania. Inergy Midstream, L.P. is a subsidiary of Inergy, L.P. Cautionary Statement Regarding Forward-Looking Statements This news release contains forward-looking statements, which are statements that are not historical in nature such as the expectation that (i) the proposed Commonwealth Pipeline will add additional transportation capacity, will be placed into service in 2015, will interconnect with multiple pipelines, and will cost approximately $1 billion; (ii) the sponsors will fund the cost equally and own equal equity interests in the project company formed to develop the pipeline; and (iii) affiliates of UGI and WGL will execute precedent agreements. Forward-looking statements are subject to certain risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or any underlying assumption proves incorrect, actual results may vary materially from those anticipated, estimated, or projected. Among the key factors that could cause actual results to differ materially from those referred to in the forward-looking statements are: weather conditions that vary significantly from historically normal conditions; the demand for high deliverability natural gas storage capacity in the Northeast; the general level of petroleum product demand and the availability of natural gas and the price of natural gas to the consumer compared to the price of alternative and competing fuels; our ability to successfully implement our business plan with respect to our continued expansion of our midstream operations; our ability to generate available cash for distribution to unitholders; the outcome of rate decisions levied by the Federal Energy Regulatory Commission; and the costs and effects of legal, regulatory, and administrative proceedings against us or which may be brought against us. These and other risks and assumptions are described in Inergy’s annual report on Form 10-K and other reports that are available from the United States Securities and Exchange Commission.
Corporate news, unit prices, and additional information about Inergy Midstream, including reports from the United States Securities and Exchange Commission, are available on the Company’s website, www.Inergylp.com. For more information, contact Mike Campbell in Inergy Midstream’s Investor Relations Department at 816-842-8181 or via e-mail at firstname.lastname@example.org.