Enstor Inc., a unit of Spain’s Iberdrola SA, is buying Caledonia Energy Partners LLC (CEP), owner of the Caledonia Gas Storage Field in northeastern Mississippi, from Tenaska Power Fund LP (TPF) and other owners, the companies said Monday.

The Caledonia facility is permitted to store 11.7 Bcf of working gas, and a permit to expand the facility to 16.9 Bcf is pending at the Federal Energy Regulatory Commission. Caledonia is fully subscribed for firm service through 2010, the companies said. It is connected to Tennessee Gas Pipeline, which delivers 2 Bcf/d to markets in the Northeast, Southeast and Ohio Valley regions.

“TPF and its partners in CEP have taken what was a depleted natural gas reservoir in 2006 and converted it into one of the most modern and efficient gas storage facilities in the U.S.,” said Paul Smith, senior managing director of Tenaska Capital Management LLC, which manages TPF. “The purchase of CEP by Enstor indicates the growing need for and value of storage in the natural gas industry.”

Houston-based Enstor is a unit of Iberdrola Renewables Inc. Enstor President Matt Morrow said the Caledonia facility, when combined with Enstor’s Freebird Gas Storage Facility in Lamar County, AL, will enhance the injection, withdrawal and contract options available to customers. Enstor acquired Freebird late last year (see Daily GPI, Dec. 21, 2007). Freebird also is connected to Tennessee Gas Pipeline. A spokeswoman told NGI that additional interconnects are being evaluated at both Freebird and Caledonia. These include Texas Eastern Transmission and Columbia Gulf Transmission.

Last month the Federal Energy Regulatory Commission issued a certificate to Enstor Houston Hub Storage and Transportation LP authorizing construction and operation of a salt dome storage facility and associated pipeline facilities in Liberty County, TX, approximately 30 miles northeast of Houston. When fully developed it would have total capacity of 46.32 Bcf, composed of 30 Bcf of working gas and 16.32 Bcf of cushion gas (see Daily GPI, April 8).

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.