Kansas City, MO-based Inergy LP said its Arlington Storage Co. LLC (ASC) subsidiary has sold out the 5.7 Bcf in available capacity at its Thomas Corners natural gas storage project located in Steuben County, NY. The company filed at FERC in mid-March to convert the depleted Thomas Corners Field in the Town of Bath into an underground gas storage facility (see NGI, March 31).

ASC said it has been in negotiations with shippers who participated in its nonbinding open season and has reached commercial terms with all shippers in the form of executed precedent agreements. The duration of the agreements is five years. The company noted that the expected revenue from the firm storage agreements meets its previously discussed objectives and does not include the potential for additional interruptible storage sales or wheeling services made possible through the dual connectivity of Thomas Corners to Tennessee Gas Pipeline Co.’s Line 400 and Columbia Gas Transmission’s A-5 Line that accesses Millennium Pipeline.

“Once again the market has responded favorably to the expansion of our natural gas storage platform in the Northeast,” said Inergy CEO John Sherman. “These contracts demonstrate continued confidence in the growth opportunities in our natural gas storage business. We look forward to meeting the expectations of these new customers, while adding further strength to our operations from high-quality, demand-driven cash flow.”

ASC filed its application for a certificate with the Federal Energy Regulatory Commission (FERC) on March 14, and is in the process of completing land and right-of-way acquisition, finalizing design and construction plans, drilling test wells and securing access to drilling rigs and equipment. ASC has requested that the Commission grant authorization for the expansion project by Sept. 30 of this year so that ASC can achieve its plans to place the expansion facilities in service as early as September 2009.

With the acquisition of ASC (see NGI, Sept. 10, 2007), Inergy also took over as the majority owner and operator of Steuben Gas Storage Co., which owns an operating storage facility in Steuben County. The Steuben facility has approximately 6.2 Bcf of working capacity, maximum withdrawal capability of 60 MMcf/d and maximum injection capability of 30 MMcf/d. It was developed and placed in service in 1991. The storage capacity is fully contracted under long-term agreements with investment-grade counterparties. The Steuben facility is connected to Dominion Transmission’s Woodhull line (see NGI, Dec. 25, 2006) and serves the Northeast gas market.

In March Inergy said it also planned to expand another salt cavern storage facility near Bath for high-deliverability service. Inergy intends to develop additional caverns with approximately 4 Bcf of working capacity, maximum withdrawal capability of 150 MMcf/d and maximum injection capability of 75 MMcf/d.

Once everything is completed, Inergy will have added approximately 15.6 Bcf of working gas capacity within approximately 60 miles of its existing Stagecoach gas storage facility. Inclusive of the Stagecoach operation, Inergy will control more than 40 Bcf of working gas capacity, making it one of the largest independent storage operators in the northeastern United States.

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