Tenaska Power Fund and Caledonia Energy Partners Sell Gas Storage Facility To ENSTOR, Inc., an IBERDROLA RENEWABLES Company - 05/19/08
OMAHA, Nebraska — Tenaska Capital Management, LLC (Tenaska Capital), manager of the Tenaska Power Fund, L.P. (TPF), announced today that TPF and the other owners have agreed to sell Caledonia Energy Partners, L.L.C. (CEP), owner of the Caledonia Gas Storage Field, a high-deliverability, multi-cycle gas storage facility in Northeast Mississippi.
The purchaser is ENSTOR, Inc., the Houston-based natural gas storage unit of Spanish-listed IBERDROLA RENEWABLES, part of the Spanish utility Iberdrola, S.A., group of companies. Credit Suisse acted as financial advisor to the sellers. The transaction is expected to close in the second quarter of 2008.
TPF, a private equity limited partnership, has been joint owner of CEP since 2006. A portion of CEP also is owned by the original sponsors of the project along with certain individuals who have been involved in the development and operation of the facility throughout its history. Pacesetter Energy, Inc., a Flower Mound, Texas-based integrated energy company, led the design, engineering and operations of the Caledonia Gas Storage Field.
The Caledonia gas storage facility currently is permitted to store 11.7 billion cubic feet (0.33 billon cubic meters) of working natural gas. A permit to expand the facility to 16.9 billion cubic feet (0.48 billion cubic meters) of working gas is currently pending approval by the Federal Energy Regulatory Commission.
The facility is fully subscribed on firm storage through March 2010, and is strategically interconnected with Tennessee Gas Pipeline in Mississippi. This pipeline provides 2 billion cubic feet per day (0.06 billion cubic meters per day) of gas supplies to growing natural gas demand markets in the Northeast, Southeast and Ohio Valley regions of the U.S. and can provide customers with firm and interruptible storage opportunities.
“TPF and its partners in CEP have taken what was a depleted natural gas reservoir in 2006 and converted it into one of the most modern and efficient gas storage facilities in the U.S.,” said Paul Smith, Tenaska Capital senior managing director. “The purchase of CEP by ENSTOR indicates the growing need for and value of storage in the natural gas industry.”
Matt Morrow, ENSTOR president and a senior vice president at IBERDROLA RENEWABLES, Inc., said the Caledonia facility, combined with ENSTOR’s Freebird Gas Storage Facility, will enhance the company’s ability to give customers superior services, rapid injection and withdrawal capacity, and a range of contract options. “We are committed to providing storage services with the operational flexibility demanded by volatile North American natural gas markets, and Caledonia will help us meet those needs.”