Project: Pine Prairie Gas Storage
Location: Louisiana

Overview:

Pine Prairie Energy Center, LLC (PPEC) wanted to develop a salt cavern natural gas storage facility. The project had a projected service availability of 4.5 BCF of working gas capacity by 2Q/2007, a cumulative 12 BCF of capacity by 2Q/2008, and 24 BCF by 4Q/2009 – in three caverns. Withdrawal capability was projected at up to 2.4 BCF daily, and up to 1.2 BCF per day of injection capability (6 to 12 annual turn service).

PPEC, which will charge market rates for natural gas storage services, has already lined up gas storage agreements with several firms, all with three- to five-year terms. E3 Consulting was asked to provide due diligence services for the proposed facility. 

E3 Services Provided:

• Comprehensive due diligence review of the proposed salt cavern storage project, covering the following aspects of the project:

• Geologic
• Surface facilities design
• Construction
• Capital cost
• Schedule
• Environmental, and
• Financial modeling

Project Spotlights:

• The project financing was the first of its kind for the “B” loan market.

• The financing was syndicated among approximately thirty lenders, hedge funds, and insurers – another first for a gas storage project of this type.

• The project was rated by Moody’s and Standard & Poors.  E3 was an active participant during the rating agency presentations in New York.

• At the request of our client, E3 personnel took an active role in support of the structuring of technical terms and conditions related to project financing.

• E3 assisted syndicate investors in understanding the technical and non-technical aspects of the project through a series of conference calls.