NGS Energy Signs Exclusivity Agreement, Considers Entrance into Arizona Natural Gas Storage Market

May 13, 2009

WESTPORT, Conn., May 13 /PRNewswire/ — NGS Energy LP and El Paso Corporation have signed a Memorandum of Acquisition and Understanding with regard to El Paso’s Pinal County, Arizona natural gas storage asset. Under the agreement, NGS Energy has an exclusive due diligence period and right to purchase all acreage, wells, geological and technical data and rights currently held by El Paso. The storage project is in the Picacho Basin and would include a 9 mile header system that could connect to Transwestern Pipeline, El Paso Natural Gas Pipeline, as well as numerous new and proposed gas fired plants.

“The growth in the Arizona market has not received the appropriate response from the natural gas storage industry,” said NGS Energy President Laura Luce. “El Paso’s work drilling and coring multiple wells to test the viability of the geology and feasibility of the project are the first steps to sincerely address Arizona’s storage need.”

“The Picacho salt basin will be developed into a highly cyclable gas storage asset that could provide Arizona customers with the flexibility it currently needs and will need with continued growth,” continued Luce.

NGS estimates the current acreage position could result in a 20 Bcf storage facility and will utilize above ground evaporation ponds. FERC filings will occur this summer with operations slated for Summer 2012.

“NGS’ background in developing storage assets will only further the speed with which the project can be brought to a market with an immediate need. NGS’ experience will ensure that the asset is developed by an experienced group in the swiftest timeframe,” commented Tom Price, Vice President El Paso.

Any interest or inquiries can be directed to NGS at 203-557-1000.

NGS Energy LP has assembled a portfolio of highly flexible gas storage assets throughout North America. Their newly operational Tres Palacios Gas Storage facility in Matagorda County, Texas just received FERC authorization to operate the entire facility including all interconnects. Other projects in various stages of development are located in Colorado and Louisiana.

El Paso Corporation provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America’s largest interstate natural gas pipeline system and one of North America’s largest independent natural gas producers. For more information, visit www.elpaso.com.


Source: newswire

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