Project: Southern Pines Gas Storage Project
Location: Mississippi

Overview:

The Southern Pines Project, developed by SG Resources Mississippi, LLC (SGRM), is a salt cavern gas storage facility comprised of a single storage cavern leached from the Byrd salt dome. Injecting fresh water from three shallow water wells into cavern wells located on the salt dome will create the cavern. The fresh water will dissolve the salt, creating a brine solution that will, in turn, be injected into five underground brine disposal wells located off the domal structure. Project construction began in early 2006, with Phase I scheduled to continue through mid-2007, and Phase II into 2009. E3 Consulting was engaged as the independent engineer on the project.

E3 Services Provided:

• Performed comprehensive due diligence services on behalf of the project’s lenders, including:

• Detailed review of the project design
• Review of the project’s geology with respect to the salt dome, raw water supply, and brine disposal
• Construction cost and schedule issues
• Environmental permitting and environmental site aspects, and
• Detailed review of the project’s financial model.

• Developed, in cooperation with the lenders and the sponsors, performance test procedures, and schedule-based financing milestones

• Monthly project construction monitoring services, consisting of monthly site visits and monthly construction loan draw certification

Project Spotlights:

• The project financing was the first of its kind for the non-recourse bank loan market.

• The financing was syndicated among several project finance lenders, another first for a gas storage project of this type.

• 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.
  
  
• Through a formal presentation in New York, as well as a series of conference calls, E3 assisted syndicate lenders in understanding the technical and non-technical aspects of the project.