The company said that it and certain funds managed by affiliates of Fortress Investment Group, would jointly acquire the Simpson County, Mississippi-based company. EnergySouth Midstream will own a majority 60% interest and will be the exclusive operating entity for the development, construction, and operation of the facility. The Fortress Funds will own the remaining 40% interest.
Ben Reese, president and COO of EnergySouth Midstream, said: Location is most important to the development of natural gas infrastructure and this facility will rest at the hub of new pipelines and supplies at a time when natural gas storage is growing evermore important to our nation’s natural gas delivery system. We’re very pleased to see this become an EnergySouth Midstream asset.
Federal Energy Regulatory Commission (FERC) permits allow the construction and operation of two salt dome caverns with a combined total working gas capacity of 12.0 billion cubic feet (bcf). We will develop those permitted caverns, and we will seek permits to expand the facility’s total working gas capacity to 30bcf through the construction and development of two additional caverns.
EnergySouth Midstream believes the facility’s advantageous location also places storage operations in close proximity to interstate pipelines and pipeline expansion projects accessing major natural gas markets, including SONAT, Crosstex, SESH, Transco, GulfSouth, and the KinderMorgan/Energy Transfer Partners Midcontinent Express.
An entity owned jointly by EnergySouth Midstream and the Fortress Funds will pay a total of approximately $140 million to acquire Mississippi Hub, subject to the satisfaction of conditions in the acquisition agreements.
