Inergy LP subsidiary Inergy Midstream LLC said Monday it is buying the Seneca Lake natural gas storage facility in Schuyler County, NY, and two related pipelines from New York State Electric & Gas Corp. (NYSEG) for about $65 million.
Seneca Lake is an approximately 2 Bcf salt cavern facility on Inergy's US Salt property outside Watkins Glen, NY, and has a maximum withdrawal capability of 145 MMcf/d and maximum injection capability of 75 MMcf/d. Seneca Lake is connected to the Dominion Transmission System via the 16-inch diameter, 20-mile Seneca West Pipeline and indirectly to the citygate of Binghamton, NY, via the 12-inch diameter, 37.5-mile Seneca East Pipeline, which runs within approximately four miles of Inergy's Stagecoach North Lateral interconnect with Millennium Pipeline.
"This acquisition expands our storage and transportation capacity and provides us with an important pipeline infrastructure that enhances the connectivity and flexibility we can offer customers on our system. The acquisition, which meets our investment criteria on a stand-alone basis, will also significantly enhance the value of Inergy's existing assets and is expected to increase our economic return on future expansion projects in the Northeast market," said Inergy LP CEO John Sherman.
Seneca Lake at close of the acquisition is expected to be contracted with a weighted average maturity of its firm storage capacity extending to 2015. Inergy said it anticipates closing the transaction by mid-2010.
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