Seeking to allay fears that natural gas as a fuel source might fall out of favor anytime soon, AGL Resources CEO John W. Somerhalder II told shareholders Wednesday that current energy market fundamentals are very favorable to natural gas now and for the foreseeable future, given its environmental and efficiency advantages.

Speaking at the Atlanta-based company’s annual shareholder meeting, Somerhalder said “the direct use of natural gas is the most efficient use of any fossil fuel and provides significant environmental benefits that cannot be matched on a large scale by any other fuel source. We believe that natural gas, the cleanest burning fossil fuel, will serve as the ‘bridge fuel’ over at least the next decade and will play an important role in meeting our nation’s future energy needs. The increasing demand for natural gas, together with our proposed natural gas storage project in Texas and pipeline projects in Virginia and Georgia, positions us well for long-term growth.”

Highlighting some of AGL’s 2007 accomplishments, the chief executive noted that the company delivered record earnings of $2.74 per basic share on strong operational results in each of the company’s business units and improved financial performance as compared to 2006 in the company’s distribution operations, retail energy operations and energy investments operating segments. He added that the company’s Golden Triangle Storage — a storage facility under development in Beaumont, TX — has received Federal Energy Regulatory Commission (FERC) regulatory approval in addition to strong local and state support (see Daily GPI, Jan. 3). Somerhalder said the company will break ground next week to begin the construction process.

The company is also constructing two pipeline projects in Virginia and Georgia that will provide supply diversity to customers in those states. The Hampton Roads Crossing pipeline in Virginia will connect the northern part of the company’s Virginia Natural Gas system with the southern portion, while the Magnolia Pipeline project in Georgia, part of the Capacity Supply Plan approved by the Georgia Public Service Commission in 2007 and subject to FERC approval, will bring natural gas supply from the Elba Island liquefied natural gas facility off the Georgia coast near Savannah to the Atlanta metropolitan area.

“These infrastructure projects, coupled with our storage development projects, illustrate that we continue to have good opportunities to deploy capital in a way that will benefit the company and its shareholders long-term,” Somerhalder said. He reiterated that the company’s projected earnings for 2008 should be in the range of $2.75 to $2.85 per share.

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