Macquarie Infrastructure Partners agreed to a multimillion-dollar sale on Sept. 5 of Leaf River Energy Center LLC, a natural gas storage facility in southeastern Mississippi.
Leaf River, strategically located with connections to six interstate pipelines, consists of three saltdome caverns with a combined working natural gas storage capacity of 32.2 million dekatherms (MMDth). Macquarie will receive $367.5 million from the sale of 100% of the membership interests of Leaf River.
The buyer, NJR Midstream, expects to benefit from the strategic location of Leaf River to expanding natural gas markets, said Steve Westhoven, president and COO of NJR Midstream owner, New Jersey Resources Corp.
“By leveraging our market expertise, NJR Midstream is well-positioned with Leaf River to be a leading Gulf Coast service provider in one of the most significant and growing energy demand centers in the United States,” Westhoven said in a statement.
Leaf River is designed with the capability to economically expand with the installation of an additional storage cavern that would add roughly 13.1 MMDth of storage capacity. Additionally, the facility came online between 2011 and 2014 and is one of the newest high capacity storage facilities in North America, according to the NJR Midstream release.
NJR Midstream serves customers from local distributors and producers to electric generators and wholesale marketers through its 50% equity ownership in the Steckman Ridge natural gas storage facility, 100% equity ownership in the planned Adelphia Gateway Pipeline Project and a 20% equity interest in the planned PennEast Pipeline Project.
With the acquisition of Leaf River, NJR Midstream will now have ownership interests in natural gas storage facilities in the Gulf Coast and Marcellus Shale regions, with working gas capacity of more than 44 MMDth.
NJR Midstream expects to close the transaction in 2019 and said it supports the company’s long-term net financial earnings growth rate of 6% to 8%.
Sidley Austin LLP acted as legal counsel to Macquarie Infrastructure and Real Assets division of the Macquarie Group for the sale. The law firm’s team was led by partner Cliff Vrielink.
Wells Fargo Securities LLC served as financial advisers to Macquarie for the deal. The Wells Fargo team comprised of Hugh D. Babowal, head of energy and power M&A, A.J. Basse, managing director of Macquarie client coverage, and Russell Clingman, managing director and head of midstream and downstream coverage.
A team from Locke Lord LLP led by Kevin Peter represented NJR Midstream in the acquisition.
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