Inergy said subsidiary Central New York Oil and Gas Co. sold the remaining 2.4 Bcf of working gas storage capacity at its Stagecoach storage field in Tioga County, NY, and is making progress advancing a Phase II expansion project at the facility that will add another 12-13 Bcf of working gas capacity.
"Our ability to sell the remaining available space at Stagecoach ahead of schedule further validates the quality of our investment in this state-of-the-art storage complex and is indicative of the strong demand for natural gas storage capacity in the Northeast," said Inergy CEO John Sherman. "We are aggressively moving forward on our development of the Phase II expansion project."
Looking to diversify from being purely a propane supply and distribution business, Kansas City, MO-based Inergy bought Stagecoach for $205 million in July (see NGI, July 18). The depleted field storage facility is a multi-cycle storage operation with 13.6 Bcf of working gas capacity, maximum withdrawal capability of 500 MMcf/d, and maximum injection capability of 250 MMcf/d. The facility was developed by eCORP LLC and was placed in commercial service during the second quarter of 2002 (see NGI, July 8, 2002). Located 150 miles northwest of New York City, Stagecoach is currently connected to Tennessee Gas Pipeline Co.'s 300 Line.
Inergy said Tuesday that environmental, geological and engineering studies are underway as well as civil survey efforts associated with the development of its expansion project. Rights to gas reservoirs in Bradford County, PA, as well as in Tioga County, NY, recently were acquired to accommodate the expansion. Inergy plans to expand the facility by drilling up to 10 new additional wells in the acquired reservoirs. In addition, it plans to build a gathering system, compressor station and a new pipeline connection between the existing compressor station and the proposed Millennium Pipeline project in northern Tioga County.
The company plans to hold an open season to test market interest in the expansion next month. Construction on the project is expected to begin in 2006 with commercial service in the fourth quarter of 2007.
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