Energy Investments
Our energy investments segment includes a number of businesses that are related and complementary to our primary business. The most significant of these businesses is our natural gas storage business, which develops, acquires and operates high-deliverability salt-dome and other storage assets in the Gulf Coast region of the United States. While this business also can generate additional revenue during times of peak market demand for natural gas storage services, the majority of our storage services are covered under a portfolio of short, medium and long-term contracts at a fixed market rate.

Jefferson Island This wholly owned subsidiary operates a salt dome storage and hub facility in Louisiana, approximately eight miles from the Henry Hub and currently consists of two salt dome storage caverns with 7.5 Bcf of working gas capacity, 0.7 Bcf /day withdrawal capacity and 0.4 Bcf /day injection capacity. The storage facility is regulated by the Louisiana Department of Natural Resources and by the FERC, which has limited regulatory authority over storage and transportation services. Jefferson Island provides storage and hub services through its direct connection to the Henry Hub and its interconnection with eight other pipelines in the area. Jefferson Island’s entire portfolio is under firm subscription for the current heating season.

In December 2009, the Louisiana Mineral and Energy Board approved an operating agreement between Jefferson Island and the State of Louisiana. The new agreement enables us to resume our efforts to obtain the environmental, safety and other regulatory approvals needed to create two new storage caverns, which would expand the total working gas capacity of Jefferson Island to approximately 19.5 Bcf.

Golden Triangle Storage In 2008, our wholly-owned subsidiary, Golden Triangle Storage, started construction on a natural gas storage facility in the Gulf Coast region of Texas. The project will consist of two underground salt dome storage caverns that will hold about 12 Bcf of working natural gas storage capacity and total cavern capacity of 18 Bcf. The facility potentially can be expanded to a total of five caverns with 38 Bcf of working natural gas storage capacity in the future. It is also expected that Golden Triangle Storage will build an approximately nine-mile dual 24" natural gas pipeline to connect the storage facility with three interstate and three intrastate pipelines.We expect the first cavern with 6 Bcf of working capacity to be in service in the second half of 2010 and the second cavern with 6 Bcf of working capacity to be in service in mid 2012.

We estimate, based on current prices for labor, materials and pad gas, that costs to construct the facility will be approximately $314 million. The actual project costs depend upon the facility’s configuration, materials, drilling costs, financing costs and the amount and cost of pad gas, which includes volumes of nonworking natural gas used to maintain the operational integrity of the cavern facility. The costs for approximately 76% of these items have been fixed and are not subject to continued variability during construction. We are not able to predict whether these costs of construction will continue to increase, moderate or decrease from current levels, as there could be continued volatility in the construction cost estimates.

Competition Our natural gas storage facilities compete with natural gas facilities in the Gulf Coast region of the United States. All of the existing and proposed high deliverability salt dome natural gas storage facilities in North America are located in the Gulf Coast region.

AGL Networks This wholly owned subsidiary provides telecommunications conduit and available for use or “dark” fiber optic cable. AGL Networks leases and sells its fiber to a variety of customers in the Atlanta, Georgia, Phoenix, Arizona and Charlotte, North Carolina metropolitan areas, with a small presence in other cities in the United States. Its customers include local, regional and national telecommunications companies, internet service providers, educational institutions and other commercial entities. AGL Networks typically provides underground conduit and dark fiber to its customers under leasing arrangements with terms that vary from one to twenty years. In addition, AGL Networks offers telecommunications construction services to its customers. AGL Networks’ competitors are any entities that have laid or will lay conduit and fiber on the same route as AGL Networks in the respective metropolitan areas.