Provides Immediate Accretion and Secures Gas and NGL Storage
Development Opportunities
KANSAS CITY , Mo.--(BUSINESS WIRE)--May. 14, 2012--
Inergy Midstream, L.P. (NYSE:NRGM) (NRGM) announced today that it has
acquired 100% of the membership interests in US Salt, LLC (US Salt) from
Inergy, L.P. (NYSE:NRGY) (NRGY) for total consideration of $192.5
million. The transaction is expected to be immediately accretive to NRGM
unitholders on a distributable cash flow per unit basis.
“The acquisition of US Salt represents the first drop down transaction
for NRGM and complements our existing natural gas and NGL storage and
transportation platform nicely. This transaction demonstrates our
commitment to growing NRGM’s distributable cash flow and delivering on
the growth expectations for the company,” said John Sherman, President
and CEO of NRGM.
US Salt, located on the shores of Seneca Lake outside of Watkins Glen,
New York, is one of five major solution mined salt manufacturers in the
United States, producing evaporated salt products for food, industrial,
pharmaceutical, and water conditioning uses. The US Salt operations are
complementary to NRGM’s existing midstream energy storage platform. The
solution mining process used by US Salt creates salt caverns that can be
developed into usable natural gas and natural gas liquids (NGL) storage
capacity. US Salt has approximately 10 bcf of available cavern space
that can potentially be developed into additional natural gas storage
capacity.
Bill Moler, Senior Vice President and COO of NRGM, added, “US Salt is
characterized by very stable cash flows and adds substantial growth
opportunities to our gas and NGL storage business at NRGM.”
The consideration of $192.5 million consists of $182.5 million of cash,
which will be drawn on NRGM’s revolving credit facility, and $10 million
of NRGM common units issued directly to NRGY. On April 16, 2012, NRGM
exercised a $100 million accordion expansion of its revolving credit
facility, increasing the total borrowing capacity to $600 million.
Terms of the transaction were unanimously approved by the Board of
Directors of NRGM’s general partner based upon the recommendation of its
Conflicts Committee.
About Inergy Midstream, L.P.
Inergy Midstream, L.P., headquartered in Kansas City, Missouri, is a
master limited partnership engaged in the development and operation of
natural gas and NGL storage and transportation assets. Inergy Midstream
owns and operates natural gas storage facilities with aggregate working
gas capacity of 41 bcf, natural gas liquids storage facilities with
capacity of 1.5 million barrels, and natural gas pipelines with 355
MMcf/d of transportation capacity in New York and Pennsylvania. Inergy
Midstream, L.P. is a subsidiary of Inergy, L.P.
About Inergy, L.P.
Inergy, L.P., also headquartered in Kansas City, Missouri, is a publicly
traded master limited partnership. Inergy’s operations include the
retail marketing, sale, and distribution of propane to residential,
commercial, industrial, and agricultural customers from customer service
centers throughout the United States. The company also operates a
natural gas storage business in Texas and an NGL supply logistics,
transportation, and wholesale marketing business that serves customers
in the United States and Canada. Through its general partner interest
and majority equity ownership interest in Inergy Midstream, L.P.
(NYSE:NRGM), Inergy is also engaged in the development and operation of
natural gas and NGL storage and transportation business in the Northeast
region of the United States.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements, which are
statements that are not historical in nature such as the expectation
that the transaction is immediately accretive to distributable cash flow
per unit and the available 10 bcf of cavern space can potentially be
developed into additional natural gas storage capacity. Forward-looking
statements are subject to certain risks, uncertainties, and assumptions.
Should one or more of these risks or uncertainties materialize or any
underlying assumption proves incorrect, actual results may vary
materially from those anticipated, estimated, or projected. Among the
key factors that could cause actual results to differ materially from
those referred to in the forward-looking statements are: weather
conditions that vary significantly from historically normal conditions;
the demand for high deliverability natural gas storage capacity in the
Northeast; the general level of petroleum product demand and the
availability of natural gas and the price of natural gas to the consumer
compared to the price of alternative and competing fuels; our ability to
successfully implement our business plan with respect to our continued
expansion of our midstream operations; our ability to generate available
cash for distribution to unitholders; the outcome of rate decisions
levied by the Federal Energy Regulatory Commission; and the costs and
effects of legal, regulatory, and administrative proceedings against us
or which may be brought against us. These and other risks and
assumptions are described in Inergy’s annual report on Form 10-K and
other reports that are available from the United States Securities and
Exchange Commission.
Corporate news, unit prices, and additional information about Inergy
Midstream, including reports from the United States Securities and
Exchange Commission, are available on the company’s website, www.Inergylp.com.
For more information, contact Mike Campbell in Inergy Midstream’s
Investor Relations Department at 816-842-8181 or via e-mail at investorrelations@inergyservices.com.
Source: Inergy Midstream, L.P.
Inergy Midstream, L.P.
Mike Campbell, 816-842-8181
investorrelations@inergyservices.com
