Spectra Energy acquires Bobcat LNG storage assets

Spectra Energy has purchased the Bobcat Gas Storage assets and development project from Haddington Energy Partners and GE Energy Financial Services, for $540 million. In addition to the purchase price, the company expects to invest an additional $400 to $450 million to fully develop the facility by the end of 2015. Once fully operational, the high-deliverability salt dome storage caverns in southeastern Louisiana will have a total working gas storage capacity of 46 billion cubic feet (Bcf).

“We are extremely pleased with the acquisition of these strategically-located natural gas storage facilities, which complement our existing pipeline and storage assets in the region and provide us with a platform for significant future storage growth,” said Greg Ebel, president and chief executive officer, Spectra Energy Corp. “Bobcat’s strategic location in the Gulf Coast and its interconnection with five major interstate pipelines, including our Texas Eastern Transmission pipeline, provides customers with the advantage and flexibility to access all the major markets in the US,” said Ebel.

“Natural gas storage has played and will continue to play an important role in the continent’s energy future,” continued Ebel. “Given the tremendous increase in natural gas supplies, the ongoing increase in natural gas-fired electric generation and the continuing growth in natural gas demand, storage infrastructure will play a vital role in meeting our customers’ needs. This project, which supports our stated plans to deploy approximately $1 billion per year in growth capital through at least 2014, is expected to earn returns on capital employed in the 10 to 12 percent range”.

Once Bobcat is fully developed, Spectra Energy’s total North American storage capacity will be approximately 340 Bcf.

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