December 7, 2007
PORTLAND, Ore. – IBERDROLA Renewable’s competitive US energy business, PPM Energy today announced the execution of definitive agreements, by its subsidiary Enstor, Inc., for the acquisition of the ownership interests in the Freebird Gas Storage facility in Lamar County, Alabama. The sellers of Freebird are multiFUELS LP and Denham Commodity Partners Fund IV LP, a fund advised by Denham Capital Management LP, a global energy- and commodities-focused private equity firm. The transaction is valued at $164MM subject to adjustments. The natural gas storage facility has an existing working gas capacity of 7.6 BCF. The facility has the potential to be expanded up to 11.4 BCF of working gas capacity and is expected to be accretive to earnings in the first full year of ownership. The acquisition is expected to close before year end 2007.
Freebird was developed by multiFUELS LP, a Houston, Texas based diversified midstream energy company. Denham provided equity financing and arranged debt financing for Freebird’s development. RBC Capital Markets advised on the sale.
PPM’s CEO Terry Hudgens said: “The Freebird facility is a proven asset that is located on a major natural gas transportation corridor with excellent market liquidity. The acquisition supports PPM’s strategy to grow its gas storage business and to increase the geographic diversity of its owned and operated storage capacity that is held by its Enstor subsidiary.”
The Freebird facility is located on the Tennessee 500 line, a major natural gas transportation pipeline from the Gulf Coast supply basins to the Northeastern US markets. The Northwest Alabama Gas District is a co-owner of the facility. The facility will provide gas storage services for natural gas distribution companies, power generators, natural gas marketers and producers.