OilVoice - Inergy to Acquire Seneca Lake Gas Storage in New York State

Inergy to Acquire Seneca Lake Gas Storage in New York State

Tuesday, January 12, 2010

Inergy, L.P. announces that its wholly-owned subsidiary, Inergy Midstream, LLC ('Inergy'), has executed a definitive agreement to purchase the Seneca Lake natural gas storage facility located in Schuyler County, New York, ('Seneca Lake') and two related pipelines for approximately $65 million from New York State Electric & Gas Corporation ('NYSEG').

Seneca Lake is an approximate 2.0 billion cubic feet (Bcf) underground salt cavern storage facility located on Inergy's US Salt property outside Watkins Glen, NY, and has a maximum withdrawal capability of 145 MMcf/day and maximum injection capability of 75 MMcf/day. Seneca Lake is connected to the Dominion Transmission System via the 16-inch, 20 mile Seneca West Pipeline and indirectly to the city gate of Binghamton, NY, via the 12-inch, 37.5 mile Seneca East Pipeline, which runs within approximately 4 miles of Inergy's Stagecoach North Lateral interconnect with the Millennium Pipeline.

'Inergy is extremely pleased to announce this agreement to acquire assets that are a strategic complement to our natural gas storage and transmission hub strategy,' said John Sherman, President and CEO of Inergy, L.P. 'This acquisition expands our storage and transportation capacity and provides us with an important pipeline infrastructure that enhances the connectivity and flexibility we can offer customers on our system. The acquisition, which meets our investment criteria on a stand-alone basis, will also significantly enhance the value of Inergy's existing assets and is expected to increase our economic return on future expansion projects in the northeast market.'

Seneca Lake began commercial operation in 1996 and at close of the acquisition is expected to be contracted with a weighted average maturity of its firm storage capacity extending to 2015. The acquisition is subject to customary closing conditions and regulatory approvals. Inergy anticipates closing the transaction by mid-2010.

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