A portion of a new pipeline that Chesapeake Utilities Corp.'s Eastern Shore Natural Gas Co. (ESNG) subsidiary proposes to build to connect Dominion's Cove Point liquefied natural gas (LNG) facility to the state's eastern shore and on into Delaware could be the first pipeline ever in Chesapeake Bay.

The $33.6 million portion of the Eastern Shore Energy Link Expansion (ESELE), an 8-mile segment of 24-inch diameter submarine pipeline, would be buried under the floor of the bay between Cove Point and Taylors Island, MD. Other segments of the nearly 75-mile ESELE would interconnect the pipeline with the Dominion LNG facility, and extend the pipeline underground through portions of Maryland's eastern shore, following a path along utility rights-of-way along state Route 16, to ESNG's home state of Delaware. If approved, it will be the largest expansion of ESNG's Maryland pipeline in nearly 50 years. Completion of the project, scheduled for November 2009, would expand by approximately one-third the interstate pipeline system of ESNG, the natural gas transmission subsidiary of Chesapeake Utilities Corp.

The project must receive a series of federal and state approvals before ESNG can proceed. The project is in pre-filing status at the Federal Energy Regulatory Commission (FERC). The entire pre-filing and approval process, including reviews of financial and environmental date, could take as long as 16 months, according to FERC spokeswoman Mary O'Driscoll.

Beyond the FERC process, the proposed pipeline will be regulated under a number of other federal and state statutes, according to Gary Setzer, program administrator for the Wetlands and Waterways Program at the Maryland Department of the Environment (MDOE). ESNG will need to gather permits from the U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service and National Marine Fisheries Service, along with at least four MDOE permits and the approval of a host of Maryland departments. ESNG has consulted with state regulators on several occasions since first broaching the idea of submerging the pipeline during a meeting with MDOE officials in January, but their application is not yet official, Setzer said.

"They're working with the state in a pre-application venue," Setzer said, adding that Maryland's approval process could take 18-24 months.

In documents filed with FERC, ESNG reports having completed 85% of the civil surveys, 73% of the environmental surveys, and 36% of the cultural resources surveys it needs for the project. The company has been meeting with stakeholders, hosting public meetings in Cambridge, MD and Georgetown, DE, this week to provide information and answer questions about the proposed pipeline.

ESNG's pipeline system has been in service since 1959. Its first segment ran from Parkesburg, PA, to Salisbury, MD. The company receives natural gas at two pipeline interconnections in southeastern Pennsylvania and one in northern Delaware. ESNG currently serves 12 industrial customers, three electric generation customers, four nonaffiliated local distribution companies and two affiliated natural gas divisions. ESNG owns and operates 331 miles of pipeline on the Delmarva Peninsula.

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