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Chesapeake Utilities Corporation announced that Eastern Shore Natural Gas Company (ESNG), Chesapeake Utilities’ interstate natural gas transmission subsidiary, completed precedent agreements with customers.
The agreements clear the way for getting a federal OK for a $99 million pipeline expansion.
“This project is the single largest expansion in Eastern Shore Natural Gas’ long history of providing safe, clean, domestic and affordable natural gas,” said Michael P. McMasters, Chesapeake Utilities Corporation CEO. “Our company continues to invest in energy infrastructure throughout the Mid-Atlantic area. This project will increase the firm transportation deliverability to our region by approximately 25 percent, supporting economic growth in the region.”
Precedent agreements have been signed by seven of ESNG’s existing customers. As a result of this expansion, this project will provide more than 60,000 dekatherms per day of natural gas capacity.
“This expansion of firm natural gas transportation capacity is a result of our ongoing commitment to providing new service and supply options for our customers,” said Stephen C. Thompson, president of Eastern Shore Natural Gas Co. “The firm transportation capacity added will position us to meet growing market demand for reliable energy in the region, as evidenced by the record number of customers participating in the project.”
The 2017 Expansion Project consists of the following:
- About 23 miles of pipeline looping in Pennsylvania, Maryland and Delaware.
- Upgrades to existing metering facilities
- Installation of an additional 3,550 horsepower compressor unit at the existing Daleville Compressor Station in Chester County, PA
- About 17 miles of new mainline extension and the addition of two pressure control stations in Sussex County, Delaware.
The new facilities are estimated to cost about $99 million. ESNG estimates that it will generate gross margin of approximately $15.7 million in the first full year after the new transportation services go into effect.
ESNG intends to file its formal certificate application for the 2017 Expansion Project with the Federal Energy Regulatory Commission (FERC) in the fourth quarter of 2016, pending the completion of its ongoing pre-filing regulatory process at the FERC.
Subject to the timing of FERC approval, ESNG intends to commence construction of the expansion project in the second quarter of 2017 and place the facilities in service during the latter part of the fourth quarter of 2017.
Chesapeake has been expanding its natural gas system as more business and residential customers request the service and natural gas prices remain low. The region now has ample supplies of natural gas, due to new production in Pennsylvania.
It now offers service in Cecil County, MD, one of the last counties on the northern I-95 corridor to have limited natural gas service.
More information about the project and its progress can be found at www.esng.com/project/2017-system-expansion.