Tenaska Power Fund, an energy fund managed by Tenaska Capital Management, has signed an agreement to purchase a 50 percent ownership interest in Caledonia Energy Partners.
Dallas-based Caledonia is converting a depleted natural gas reservoir near Caledonia, Mississippi into a high-deliverability, multi-cycle gas storage facility.
This is TPF’s third acquisition since it completed its initial fundraising in 2005. Last year it acquired a 315-megawatt power plant in Virginia and a 308-megawat power plant in Illinois.
Once it is completed, the Caledonia gas storage facility will be capable of storing 11.7 billion cubic feet of natural gas. The facility is expected to go into service in the spring of 2007.
The storage facility will be connected to the Tennessee Gas Pipeline in Mississippi. This pipeline serves the Northeast, Southeast and Ohio Valley natural gas markets.
“Higher gas prices and higher gas price volatility, combined with the expected growth in liquefied natural gas, have increased the need for and value of gas storage,” Tenaska Senior Managing Director Paul Smith said in a statement. “In addition, Caledona is downstream of pipeline constraints in the Gulf Coast region, and hence is geographically very well positioned.”
Tenaska is one of the largest independent power producers in the United States. In 2004, Tenaska was ranked by Forbes magazine as the 24th largest private company in the US. It and its affiliates currently own, operate and manage eight power plants in six states totaling approximately 7,400 megawatts of generating capacity.