Falcon Gas Storage Company Plans Open Season at MoBay Gas Storage Hub for Proposed Phase I Expansion

Business Wire, Feb 15, 2006

HOUSTON -- Falcon Gas Storage Company, Inc. today announced that it will hold a non-binding open season for 15 Bcf of high-deliverability, multi-cycle (HDMC) working gas capacity at its MoBay Storage Hub, based on strong demand for the facility's original Phase I capacity. E[acute accent]The Company is in the process of finalizing binding, multi-year precedent agreements for 100% of the original Phase I scope of 12 Bcf for the proposed facility, which will connect directly to Gulfstream Natural Gas System, Florida Gas Transmission, Transco Pipeline and Gulf South Pipeline. The expanded Phase I scope of the project would add an additional 15 Bcf of working gas capacity, bringing the total to 27 Bcf. E[acute accent]Falcon's MoBay Storage Hub, the most southeasterly underground natural gas storage facility in the United States, is located at the confluence of major market and supply area pipeline systems and processing plants serving natural gas and electric utilities in the Southeast and Northeast markets. Direct, bi-directional receipt and delivery points are planned with Gulfstream Natural Gas System (Station 410), Florida Gas Transmission (Zone 3), Transco (Zone 4A, Mobile Bay Lateral) and Gulf South Pipeline (Zone 4). The Destin Pipeline will be accessible through the connection with Gulfstream. Receipt point options with supply pipelines include Chevron, Dauphin Island Gathering System (Duke Energy Field Services), Exxon Mary Ann Plant, the Mobil Bay Processing Partners plant, the Shell Yellowhammer plant and the Williams processing plant. E[acute accent]"MoBay will provide an important new source of supply security to the nation's natural gas infrastructure, benefiting residential and commercial natural gas users from Mississippi to Florida to New York," said Falcon Chief Operating Officer Edmund Knolle. "Recent supply disruptions along the Gulf Coast, combined with continued growth in gas demand and the unprecedented volatility in gas prices, have substantially increased the value of storage as a long-term, strategic asset. We've seen significant interest from firms that have not utilized storage in the past. MoBay will be designed to operate in conditions that meet or exceed those under which the interconnecting pipelines are designed to operate." E[acute accent]The facility's strategic location adjacent to Gulfstream Station 410 will provide direct access to all major pipelines in the area as well as the tailgate of several gas processing plants. All of the potential receipt and delivery points are located within two miles of the proposed plant site. E[acute accent]Falcon plans to file permit applications with the Federal Energy Regulatory Commission and the State of Alabama by May 2006. The projected Phase I in-service date is October 2007. E[acute accent]MoBay's open season will start February 15, 2006. All bids are due by 5:00 p.m. CST on March 15, 2006. For more information on the open season, see Falcon's Web site at www.falcongasstorage.com, or contact Chief Commercial Officer Jeff Foutch, jhfoutch@falcongasstorage.com, or Eastern Region Director of Marketing Michael Moore, mmoore@falcongasstorage.com, at 713-961-3204.

E[acute accent]About Falcon Gas Storage Company, Inc.

E[acute accent]Houston-based Falcon Gas Storage Company is the largest independently owned developer and operator of high-deliverability, multi-cycle (HDMC) natural gas storage capacity in the United States. The largest privately owned gas storage provider in Texas, Falcon has more than 22 Bcf of working gas storage capacity at its Hill-Lake and Worsham-Steed gas storage facilities. Falcon also is developing the MoBay Storage Hub, an HDMC gas storage project in southwest Alabama, which ultimately will have up to 50 Bcf of working gas capacity available to serve markets in Florida and the southeast. Visit Falcon at www.falcongasstorage.com.