Falcon Gas Storage Company Announces Open Season for North Texas Capacity

Business Wire, Jan 22, 2009

HOUSTON -- Falcon Gas Storage Company, Inc. today announced that it will conduct an open season for storage capacity at its Worsham-Steed and Hill-Lake Gas Storage Facilities in North Texas starting January 28, 2009. Bids are due by February 12, 2009.

"We will be leasing up to 6 Bcf of capacity for single and multi-year contracts that start April 1, 2009," said Marketing Vice President John Holcomb. "A variety of storage services will be offered, including two- to five-cycle firm storage and load following and hourly balancing (LFHB), for this coming summer."

Falcon's 24-hour intraday LFHB service provides gas-fired power plants with a practical and economical way to balance daily gas purchases with hourly power dispatch. North Texas is dominated by gas-fired power generation, and LFHB has become a critical component of efficient gas supply in this market.

Falcon achieved full commercial operation of its NorTex gas storage and midstream facilities in December 2008. In January 2009, the Company began amortizing a $335 million construction project finance loan from a consortium of banks led by Barclays Bank PLC.

"NorTex is now the largest independent operator of third-party storage in North Texas," said Falcon President Jim Goetz. "We've added 25 Bcf of working gas capacity, a 60-mile, high-pressure gas transmission pipeline, and two state-of-the-art cryogenic gas plants totaling 140 MMcfd of processing capacity."

Goetz recently joined Falcon along with Executive Chairman Tore Nelson and Operations Executive Vice President Vernon Williams. Goetz and Williams, who have extensive experience in gas storage facility development and management, were responsible for building and managing the Caledonia gas storage facility in Mississippi and have previously worked for a number of leading natural gas companies.

About Falcon Gas Storage Company, Inc.

Through its wholly-owned subsidiaries and affiliated companies, Houston-based Falcon Gas Storage Company is one of the largest independently owned developers and operators of high-deliverability, multi-cycle (HDMC) natural gas storage capacity in the United States. Falcon's NorTex Gas Storage Company subsidiary owns and operates 35 Bcf of gas storage capacity with approximately 1.0 Bcfd of deliverability at Hill-Lake and Worsham-Steed. Through its MoBay Storage Hub LLC affiliate, Falcon is developing a 50 Bcf HDMC gas storage project in southern Alabama with 1.0 Bcfd of injection and withdrawal capacity. Visit Falcon at www.falcongasstorage.com.