Spectra Energy Corp. signed a definite agreement to acquire the Bobcat Gas Storage project and its associated assets from Haddington Energy Partners III LP and GE Energy Financial Services for US$540 million.

The project, located in Point Barre in St. Landry Parish, La., approximately 45 miles north of the Henry Hub with access to five interstate pipelines, currently consists of two salt dome storage caverns that are expected to have a total capacity of 19 billion cubic feet (Bcf) by the end of summer. Spectra Energy officials anticipate investing $400-450 million in development costs through the end of 2015 that will increase the capacity to 46 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 U.S.,” 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.”

The agreement is expected to close by the end of 2010. – Frank Nieto