Inergy to Acquire Seneca Lake Gas Storage in New York State
Accelerates Northeast Natural Gas Hub Strategy
KANSAS CITY, Mo. -- January 11, 2010
Inergy, L.P. (NASDAQ:NRGY) announced today that its wholly-owned subsidiary,
Inergy Midstream, LLC (“Inergy”), has executed a definitive agreement to
purchase the Seneca Lake natural gas storage facility located in Schuyler
County, New York, (“Seneca Lake”) and two related pipelines for approximately
$65 million from New York State Electric & Gas Corporation (“NYSEG”).
Seneca Lake is an approximate 2.0 billion cubic feet (Bcf) underground salt
cavern storage facility located on Inergy’s US Salt property outside Watkins
Glen, NY, and has a maximum withdrawal capability of 145 MMcf/day and maximum
injection capability of 75 MMcf/day. Seneca Lake is connected to the Dominion
Transmission System via the 16-inch, 20 mile Seneca West Pipeline and
indirectly to the city gate of Binghamton, NY, via the 12-inch, 37.5 mile
Seneca East Pipeline, which runs within approximately 4 miles of Inergy’s
Stagecoach North Lateral interconnect with the Millennium Pipeline.
“Inergy is extremely pleased to announce this agreement to acquire assets that
are a strategic complement to our natural gas storage and transmission hub
strategy,” said John Sherman, President and CEO of Inergy, L.P. “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.”
Inergy will conduct a live conference call and internet webcast Tuesday,
January 12, 2010, to discuss its business outlook giving effect to the Seneca
Lake transaction as well as the recently announced Liberty Propane, L.P. and
MGS Corporation transactions. The call will begin at 3:15 p.m. CT. The call-in
number for the management conference call is 1-877-405-3427, and the
conference name is Inergy. The live internet webcast and the replay can be
accessed on Inergy’s Web site, www.inergylp.com. A digital recording of the
call will be available for one week following the call by dialing
1-800-642-1687 and entering the pass code 50395843.
Seneca Lake began commercial operation in 1996 and at close of the acquisition
is expected to be contracted with a weighted average maturity of its firm
storage capacity extending to 2015. The acquisition is subject to customary
closing conditions and regulatory approvals. Inergy anticipates closing the
transaction by mid-2010.
About Inergy, L.P. and Inergy Holdings, L.P.
Inergy, L.P., headquartered in Kansas City, Mo., is among the fastest growing
master limited partnerships in the country. The Company’s operations include
the retail marketing, sale, and distribution of propane to residential,
commercial, industrial, and agricultural customers. Today, Inergy serves
nearly 800,000 retail customers from over 300 customer service centers
throughout the United States. The Company also operates a 40 Bcf natural gas
storage business; a liquid petroleum gas storage business; a solution-mining
and salt production company; and a propane supply logistics, transportation,
and wholesale marketing business that serves independent dealers and
multi-state marketers in the United States and Canada.
Inergy Holdings, L.P.’s assets consist of its ownership interest in Inergy,
L.P., including limited partnership interests, ownership of the general
partners, and the incentive distribution rights.
This news release contains forward-looking statements, which are statements
that are not historical in nature such as the expectation that the Seneca Lake
transaction will close by mid-2010. Forward-looking statements are subject to
certain risks, uncertainties, and assumptions. Should one or more of these
risks or uncertainties materialize, or any underlying assumption proves
incorrect, actual results may vary materially from those anticipated,
estimated, or projected. Among the key factors that could cause actual results
to differ materially from those referred to in the forward-looking statements
are: weather conditions that vary significantly from historically normal
conditions, the demand for high deliverability natural gas storage capacity in
the Northeast, the general level of petroleum product demand and the
availability of supplies, our ability to successfully implement our midstream
business plan, whether necessary regulatory approvals will be obtained, our
ability to generate available cash for distribution to unitholders, and the
costs and effects of legal and administrative proceedings against us or which
may be brought against us. These and other risks and assumptions are described
in Inergy’s annual report on Form 10-K and other reports that are available
from the United States Securities and Exchange Commission.
Corporate news, unit prices, and additional information about Inergy,
including reports from the United States Securities and Exchange Commission,
are available on the Company’s Web site, www.InergyLP.com. For more
information, contact Mike Campbell in Inergy’s Investor Relations Department
at 816-842-8181 or via e-mail at email@example.com.
Multimedia Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6136941
Mike Campbell, 816-842-8181
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