REFILE-Bobcat La. natgas storage site begins startup

(Refiles to add the dropped word Energy in first paragraph)

NEW YORK, Nov 12 (Reuters) - Owners of the Bobcat natural gas storage facility, Haddington Energy Partners III LP and General Electric Co (GE.N) unit GE Energy Financial Services, said Wednesday the site in south-central Louisiana completed its first week of commercial operations.

The Bobcat storage project is located in St. Landry Parish, 45 miles from the Henry Hub, the clearing point for NYMEX natural gas futures contracts and the most liquid trading point in natural gas over-the-counter and cash markets.

The first salt cavern, with an initial capacity near 5.4 billion cubic feet of working gas, began operations Nov. 1, the company said. A second cavern is expected to be completed in the third quarter 2009, increasing capacity to 15.6 bcf by the end of 2009.

The company said the site contains adequate space to expand with additional storage caverns.

Bobcat CEO Tom Dill said the company overcame escalating construction and material costs, a direct hit by Hurricane Gustav and extreme weather from Hurricane Ike to complete the first cavern and meet contractual commitments.

Underground natural gas storage is a critical component of the U.S. natural gas market, balancing weather-driven, highly seasonal demand and fluctuations in supply.

Bobcat also provides access to natural gas from offshore in the Gulf of Mexico, onshore in Texas and Louisiana, as well as gas from the Barnett Shale.

The site connects with five major interstate pipelines, Florida Gas Transmission Co, Texas Eastern Transmission Corp, Transcontinental Gas Pipeline Corp, ANR Pipeline Co and Gulf South Pipeline Co, providing gas to key markets in the U.S. Northeast, Midwest, Mid-Atlantic, Southeast and Florida.

Bobcat is being developed by Port Barre Investments LLC, owned by members of management, Haddington Energy Partners III LP, a private equity fund managed by Houston-based Haddington Ventures LLC, and GE Energy Financial Services, the Stamford, Connecticut-based energy investing unit of GE. (Reporting by Eileen Moustakis; Editing by Walter Bagley)