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New Chesapeake Utilities Pipeline to Connect Cove Point with Delmarva

Eastern Shore Natural Gas Co. (ESNG), a subsidiary of Chesapeake Utilities, announced Friday it is planning an interstate pipeline expansion to add 60,000 Dth/d of capacity into its delivery area on the Delmarva Peninsula. This will increase the line's capacity by about 33% and would be the largest expansion since the line was built in 1959.

The line will carry gas directly from the Cove Point LNG terminal on the western shore of the Chesapeake Bay under the bay and into the southern part of the Delmarva Peninsula. The company said it had entered into agreements with two of its customers, affiliate LDC Chesapeake Utilities and Delmarva Power & Light, for the expanded capacity. The project would include approximately 63 miles of pipeline that originates in Calvert County, MD, crosses the bay into Dorchester and Caroline Counties, MD and then connects with ESNG's existing system in Sussex County, DE, which includes a rapidly growing Atlantic Ocean beach and retirement area.

The total project is expected to cost approximately $93 million, depending upon the final design. Eastern Shore's current pipeline connects to Transcontinental Gas Pipeline and Columbia Gas Transmission and travels down the peninsula from north to south.

Eastern Shore expects to begin the pre-filing process with the Federal Energy Regulatory Commission in the latter part of 2006 or early 2007. The regulatory and permitting process for a project of this size could be 24 months or even longer, with new services targeted to begin in late 2009.

ESNG currently serves 12 industrial customers, three electric generation customers, four non-affiliated local distribution companies and two affiliated natural gas divisions. Its pipeline, now more than 331 miles long, is the only natural gas pipeline on the Delmarva Peninsula.

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