Falcon Gas Storage announced Wednesday that GAStorage Investment LLC, a company organized by Arcapita, a global investment group, has bought a 90% equity stake in Falcon and has provided additional capital to complete the construction Falcon's gas storage facilities. The total value of the initial transaction is $100 million.
"Our new partners will provide Falcon with the capital necessary to complete the Phase II and III expansions of our Hill-Lake Gas Storage Facility, as well as the Phase I and II expansions of our Worsham-Steed Gas Storage Facility," said Falcon President John M. Hopper. "In addition, we have earmarked part of our new investment capital for the development of our MoBay Storage Hub in southwestern Alabama, which will serve markets in Florida and the southeast."
Together, the Hill-Lake and Worsham-Steed facilities have more than 20 Bcf of high-deliverability, multi-cycle working gas storage capacity and, with the new expansions, will have up to 1 Bcf/d of aggregate maximum injection and withdrawal capacity to serve the Dallas-Ft. Worth and North Texas markets, including the rapidly expanding Barnett Shale gas play.
Falcon held an open season on its proposed MoBay storage field in Mobile County, AL, in 2003. The project, which would provide 20 Bcf of working gas capacity and 450 MMcf/d of initial deliverability, was oversubscribed. Falcon now intends to move forward with an application with FERC for the project.
"We also have some other storage prospects that we haven't gone public with that are located in the Gulf Coast and in the Southwest," said spokesman Edmund Knolle. He said the Arcapita funding would help move those projects forward as well.
Falcon's current management team will remain in place and will retain a minority ownership in the company. Arcapita is headquartered in Bahrain with US and UK offices in Atlanta and London, respectively. Until March 15, Arcapita's U.S. operations were conducted as Crescent Capital Investments Inc.
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.