Cardinal Gas Storage Partners LLC has acquired Monroe Gas Storage Co. LLC and an option on development rights to an adjacent depleted natural gas reservoir from High Sierra Monroe LLC, a unit of High Sierra Energy LP and other shareholders. Total consideration was about $148 million, Cardinal said.
Monroe is a high-deliverability storage reservoir in northeast Mississippi that has been in operation since 2009 and has 12 Bcf of working capacity currently in service. Subject to regulatory approval and market demand, the facility has potential to add up to 12 Bcf of working capacity through expansion of the existing facility and development of the option on the adjacent field. Monroe has two pipeline interconnects through a separate east and west header system to Tennessee Gas Pipeline and Texas Eastern Transmission.
"The Monroe facility is strategically located downstream of known pipeline bottlenecks," said Cardinal CEO Jeff Ballew. "It is well positioned in an area that serves a suite of markets, including the Northeast, the Atlantic Seaboard and the fast-growing, gas-fired power generation load of the southeastern United States.
"This location adds market diversity to the existing Cardinal assets, primarily located in north Louisiana. This facility's direct interconnects to the Tennessee Gas Pipeline 500 and Texas Eastern M-1 lines create the premier reservoir storage service alternative in the Black Warrior Basin."
Cardinal has both salt cavern and depleted reservoir gas storage development projects. Arcadia Gas Storage is an operating salt cavern facility near the town of Arcadia in Bienville Parish in North Louisiana. Perryville Gas Storage is a salt cavern development project located 12 miles south of Delhi, LA. Cadeville Gas Storage, located in Ouachita Parish about 10 miles southwest of Monroe, LA ,is currently developing 16.5 Bcf of working capacity.
Last fall at an industry conference Ballew said Cardinal has benefited from growing shale gas production from plays such as the Barnett, Fayetteville, Woodford and Haynesville as its projects have been oriented around the Perryville Hub in northeast Louisiana, where much of that gas is directed on its way to markets (see Daily GPI, Oct. 20, 2010).
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