SGR Holdings LLC subsidiary SG Resources Mississippi LLC (SGRM) said it has closed a $100 million credit facility for its Phase III expansion of the Southern Pines Energy Center high-deliverability natural gas storage facility in Greene County, MS, and that Phase II is moving along right on schedule.

SunTrust Robinson Humphrey was the sole lead arranger for the financing of Phases I and II as well as for the syndication of the new $100 million credit facility.

The first cavern began commercial operation on May 1 and a second cavern is scheduled for service early in the second quarter of 2009. When completed, Southern Pines will provide 30 Bcf of storage in three caverns and will be capable of supporting withdrawal rates of up to 3.0 Bcf/d and injection rates of up to 1.5 Bcf/d to provide reliable high-deliverability peaking and balancing services to markets in the Gulf Coast, Southeast and Northeast regions of the United States.

Southern Pines was positioned so that it would have direct interconnects to Destin Pipeline Co., Gulf South, Florida Gas Transmission Co. (FGT) Zone 3 mainline, Transcontinental Gas Pipe Line Corp.’s Transco Mobile Bay Lateral 4a and the Southeast Supply Header System. Each of the interconnections uses bidirectional metering facilities. In addition, the storage facility provides indirect access to Southern Natural Gas (Sonat), Gulf South Pipeline, Gulfstream Natural Gas System and Tennessee Gas Pipeline by way of Destin and another new interconnection with Gulfstream via the Mobile Bay Lateral.

In June SG Resources Mississippi asked the Federal Energy Regulatory Commission for permission to further increase the capacity of Southern Pines to about 43 Bcf (see Daily GPI, June 10). The company asked FERC to amend its original certificate that was issued in October 2002, which authorized the construction of a combined 12 Bcf of working gas capacity in two underground caverns at its Southern Pines Energy Center and to amend a subsequent certificate issued in January 2007, which added a third cavern and raised the combined working gas capacity of the facility to 24 Bcf (see Daily GPI, Jan. 26, 2007; Oct. 11, 2002).

Houston-based SGR Holdings owns a 60% interest in SG Resources Mississippi. An entity owned by ArcLight Capital Partners LLC holds the remaining 40% interest.

©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.