Spectra Energy will buy the Bobcat Gas Storage assets and development project from Haddington Energy Partners III and GE Energy Financial Services for $540m.
Spectra plans to spend an additional $400m to $450m on fully developing the facility by the end of 2015.
Once operational, the salt dome storage caverns in southeast Louisiana, US, will have a total working gas storage capacity of 46bcf.
Spectra Energy Corp president and chief executive officer Greg Ebel said that Bobcat’s strategic location in the Gulf Coast will provide access to all the major markets in the US.
“This project, which supports our stated plans to deploy approximately $1bn per year in growth capital through to at least 2014, is expected to earn returns on capital employed in the 10-12% range,” Ebel said.
The asset once complete will bring Spectra’s total North American storage capacity to about 340bcf.
The transaction, subject to approvals, is expected to close before the end of the year.
