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Inergy Subsidiary Files for New York Storage Conversion

Inergy subsidiary Arlington Storage Co. LLC (ASC) has filed with FERC to develop and operate a depleted reservoir natural gas storage project in Steuben County, NY, known as the Thomas Corners project.

The project will involve conversion of the depleted Thomas Corners Field in the Town of Bath into an underground gas storage facility. ASC said the facility would have a working gas capacity of 7 Bcf and interconnections with Tennessee Gas Pipeline Co.'s Line 400 and Columbia Gas Transmission's A-5 line. ASC also notified the Federal Energy Regulatory Commission (FERC) that it plans to install and operate interconnection and metering facilities connecting to a local distribution company, Corning Natural Gas Co. ASC requests authority to charge market-based rates for the project and proposes to begin construction in October.

With the acquisition of ASC (see Daily GPI, Sept. 6, 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 Daily GPI, Dec. 20, 2006) and serves the Northeast gas market.

Inergy also said it plans 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 (see Daily GPI, Oct. 27, 2005; July 12, 2005). Inclusive of the Stagecoach operation, Inergy will control more than 40 Bcf of working capacity, making it one of the largest independent storage operators in the northeastern United States.

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