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Eastern Shore Natural Gas Seeks to Expand Delmarva Peninsula Pipe System Again

Less than a month after completing its most recent expansion (see Daily GPI, Dec. 27, 2005), Eastern Shore Natural Gas Co. (ESNG), a subsidiary of Chesapeake Utilities Corp. serving the Delmarva Peninsula, said this week it has filed an application with the Federal Energy Regulatory Commission (FERC) requesting authority to construct new pipeline facilities in Pennsylvania and Delaware.

The facilities are expected to provide additional firm natural gas transportation service necessary to meet the requirements of ESNG's customers for 2006 through 2008.

ESNG said the new facilities to be constructed are in response to customers' requests during its most recent open season. The FERC application, if approved, will allow the company to construct the necessary facilities to meet those needs. The project will provide the additional firm service that customers have requested beginning in the fourth quarter of 2006.

The project provides additional firm peak day capacity of 47,350 Dth/d of natural gas, representing a 36% increase on ESNG's system. The total investment for the company is $33.6 million, with expected annualized revenue of $3.7 million the first year, and $6.8 million after the full build-out of facilities.

The three-year project consists of approximately 55 miles of mainline extension and looping in the states of Pennsylvania and Delaware and the construction of two new delivery points. Approximately one-half of the investment, or $17 million, will be spent in 2006 with the remaining investment split evenly over 2007 and 2008.

"The growth on the Delmarva Peninsula, whether from a residential or commercial perspective, necessitates this expansion project," said Stephen C. Thompson, president of ESNG. "Furthermore, ESNG has expanded its pipeline capacity by 55% during the past five years to meet the needs of its customers, and we are committed to continue meeting those needs well into the future."

Eastern Shore owns and operates the only natural gas pipeline on the Delmarva Peninsula south of the Chesapeake and Delaware Canal, and has been serving customers' gas needs since 1959. The system originates in southeastern Pennsylvania and runs north to south down through Delaware and parts of the eastern shore of Maryland.

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