January 18, 2005 -- Tulsa, Oklahoma – SemGroup, L.P. announced today the acquisition by its subsidiary, SemGas, L.P., of Greyhawk Gas Storage Company, L.L.C., a natural gas storage development project located in Steuben County, New York, near the town of Corning. The assets were purchased from Falcon Northeast Holdings, L.L.C. The acquisition closed on January 14 and the sale price was not disclosed. This is SemGroup’s second acquisition of storage facilities in Steuben County within 75 days.
"Greyhawk will provide six billion cubic feet of working gas storage," said Tom Kivisto, SemGroup president and chief executive officer. "The project will be developed as a high deliverability multi-cycle facility to inject and withdraw storage inventory throughout the year. This will provide local distribution companies with additional peakday deliverability in the area."
Kivisto commented the Greyhawk assets complement the salt cavern natural gas storage development project that SemGroup acquired in November 2004. Previously named New Avoca, that development project has been renamed Cohocton Valley to better reflect its location.
"Greyhawk already has a FERC 7 (c) Certificate and should be commercially operable within the year," Kivisto said. "Coupled with the longer-term expansion potential of Cohocton Valley, these storage assets will provide customers in the New York and New England areas the long-term storage services needed as the transportation infrastructure expands beyond its current constraints."
John M. Hopper, Falcon’s president and chief executive officer, said Falcon sold the New York assets in order to focus its gas storage operating and development efforts on existing gas storage facilities in north Texas and its storage development along the Texas, Louisiana and Mississippi Gulf Coast. Houston-based Falcon Gas Storage Company is the largest independently owned developer and operator of highdeliverability, multi-cycle (HDMC) natural gas storage capacity in the United States.
Kivisto said SemGas, L.P. is responsible for completing and operating the Greyhawk and Cohocton Valley storage facilities.
Multiple connections are planned for both projects. These include the Tennessee Gas Pipeline, which delivers into the New England markets, and the Millennium Pipeline which is scheduled to begin serving the New York area during 2006.
SemGroup, L.P. is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. It is ranked #14 on Forbes magazine’s list of America’s Largest Private Companies. For additional information, visit www.semgroupcorp.com.