Independent gas storage developer NGS Energy LP, the parent company of Leaf River Energy Center LLC, said Leaf River will acquire the New Home Natural Gas Storage Project from El Paso Corp. subsidiary Southern Natural Gas Co.

The acquisition will advance NGS' opportunity for gas storage operations on the New Home dome and provide developmental efficiencies, enhanced risk management and economies of scale, the company said last week.

The project is a high deliverability, multi-cycle natural gas salt dome storage facility designed to safely enhance energy supply in the Southeast. The facility will be located in Smith County, MS, about 55 miles southeast of Jackson.

As part of the sale of its New Home assets, Southern Natural will also sign a firm storage commitment to store gas in the second of Leaf River's four underground salt caverns beginning in 2010.

Leaf River filed its certificate application with the Federal Energy Regulatory Commission (FERC) on Oct. 11 (see NGI, Oct. 15). In its filing, Leaf River requested authorization from the FERC to charge market-based rates and build a 43-mile, 24-inch diameter pipeline header system. The bidirectional, looped header system will traverse Smith, Jasper and Clarke Counties in Mississippi and have interconnections with Kinder Morgan's Midcontinent Express pipeline, the Gulf South Southeast Expansion, Tennessee Gas Pipeline (Zone 1), Transcontinental Gas Pipe Line (Zone 4) and Destin Pipeline (Shubuta), in addition to an interconnection with Southern Natural.

The storage project would act as a bridge between the prolific sources of gas supply in the Barnett, Woodford and neighboring shale plays and high-demand markets in the Northeast, Mid-Atlantic and Southeast, NGS said previously.

Leaf River held a binding open season, which closed Nov. 15, and is continuing discussions with prospective firm storage customers to confirm additional capacity commitments at the facility. Pending receipt of necessary approvals, Leaf River expects to begin construction in mid-2008, targeting a July 1, 2009 in-service date.

For more information, call Laura Luce at (203) 454-4126.

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