Inergy, L.P. (NYSE:NRGY) announced today that its wholly owned subsidiary, Inergy Midstream, LLC, is conducting a non-binding open season for firm wheeling service on an extension of its Tres Palacios gas storage facility pipeline header system. The proposed pipeline extension will create a new point of interconnection at the tailgate of Copano Energy, LLC’s (“Copano”) Houston Central gas processing plant in Colorado County, Texas.
The Tres Palacios header extension project is expected to include approximately 20 miles of newly constructed lateral piping, additional compression, and interconnect facilities (the “Tres Header Project”). Once complete, the Tres Header Project will allow shippers to move gas along 60 miles of header pipe with access to a combination of 10 interstate and intrastate pipelines and the Tres Palacios storage facility. Additionally, shippers will have access to the Tres Palacios Hub point, which is listed on the Intercontinental Exchange (“ICE”) for natural gas transactions.
Copano’s Houston Central Plant currently provides 700MMcf/d of processing capacity and 22,000 barrels per day of fractionation capacity and is being modified and expanded to handle rich natural gas from the Eagle Ford Shale play. The Tres Palacios gas storage facility will give producers additional options for the sale of residue gas at the tailgate of the Houston Central Plant.
The Tres Palacios gas storage facility is located approximately 100 miles southwest of Houston in Matagorda County, Texas. The facility includes 38.4 BCF of FERC-certificated working gas capacity with planned expansion to 47.9 BCF. The storage facility is strategically situated near the Eagle Ford Shale and one of the largest gas-fired power generation markets in the United States. Inergy acquired the Tres Palacios storage facility in October 2010.
The Tres Header Project, together with the existing Tres Palacios header system, is expected to provide significant commercial opportunities to Eagle Ford Shale producers, marketers, and others to deliver their gas to multiple demand markets and or storage. The open season is targeting shippers seeking: (i) additional market flexibility and reliability; (ii) liquid points of sale for locally produced gas from the Eagle Ford Shale play; (iii) additional storage opportunities; and (iv) to capture pricing differentials between the various interconnected interstate and intrastate pipelines.
Rates, including fuel retention, will be determined after the conclusion of this non-binding open season and are dependent upon the final scope of facilities and firm service commitments. Indicative rates are provided in the non-binding open season package.
The non-binding open season will commence on January 18, 2011, and will close February 15, 2011, at 5:00 p.m. Central Time.
The anticipated in-service date for the pipeline extension project is the summer of 2012.