QNGS Holdings, LLC, a portfolio company of Quantum Energy Partners, LLC and Dr. Larry Bickle, announced that the company is combining its two natural gas storage development entities, Merchant Energy Partners, LLC of Denver, Colorado and Icon NGS, LLC of Houston, Texas.
QNGS assembled two separate teams to pursue development of gas storage across North America.MEP focused its development activities on the Rockies and the Western United States while Icon focused on the Gulf Coast and Eastern U.S. markets.Both entities have successfully identified, and developed storage projects (through the certification process) that support new supply area pipeline infrastructure. The newly combined company will be called Merchant Energy Holdings LLC.
MEP received FERC approval (CP11-40) on April 12, 2011 for its East Cheyenne Gas Storage project in northeast Colorado that will create the first merchant storage facility to serve the pipelines connected to the nearby Cheyenne Hub, including the Trailblazer and Rockies Express pipelines.The East Cheyenne Gas Storage project is being developed from a depleted reservoir in Logan County, Colorado.East Cheyenne held a groundbreaking ceremony on May 23, 2011 with Governor John Hickenlooper addressing the benefits of the project to Colorado’s Clean Air and Clean Jobs initiative as well as the investment in the local community. With the implementation of the Clean Air legislation, there is a mandate to retire selective coal-fired generation capacity. East Cheyenne is one of the resources that will facilitate the efficient operation of natural gas fired generation to replace the retired coal facilities.
Icon received FERC authorization on March 18, 2011 (CP10-494) for its Tallulah Gas Storage project, a high deliverability, multi cycle salt cavern storage facility in Madison Parish in northeast Louisiana. The Tallulah Gas Storage project is just 15 miles east of the Delhi Hub, a confluence of new pipeline infrastructure serving the prolific shale plays in Louisiana, Texas, and Oklahoma and providing low cost gas supply and transportation to the growing markets in Florida and to the Southeast, Midwest, and Northeast markets. Negotiations are currently underway to conclude binding commitments with shippers for capacity in the Tallulah project.
With both projects now positioned to begin construction, the management teams of MEP and Icon will be consolidated under Merchant Energy Holdings, LLC, and will be responsible for execution of both projects and for pursuing future development opportunities in the natural gas storage market. The new entity will be headed by William A. Lang as President & CEO, formerly the CEO of Icon and Mark A. Fullerton as Executive Vice President and Chief Operating Officer. The headquarters for the combined entity will be in Houston with a satellite office in Denver (Littleton), Colorado.
According to Dr. Larry Bickle, Chairman of the combined entities, “QNGS’ strategy of identifying market and supply driven locations for new storage facilities succeeded in developing two strong projects despite a challenging market for natural gas storage. The new infrastructure developments in the Rockies and at the Delhi Hub represent specific needs for storage to enhance the operational efficiencies and reliability of the new pipeline infrastructure.Growing demand for natural gas fired power generation will increase the need for storage services in both locations.”
“The executive team leading Merchant Energy Holdings brings some of the industry’s broadest experience in natural gas storage development, construction, and operation of both reservoir and salt cavern formations.We are very excited to have two outstanding gas storage investment projects coupled with an experienced team to execute the construction of these projects and bring them to commercial reality,” said Dheeraj Verma, Managing Director, Quantum Energy Partners.