Chesapeake Utilities of Dover, DE, said Friday that its pipeline subsidiary Eastern Shore Natural Gas has received the green light from FERC to expand its system in Pennsylvania and Delaware.

The project is Phase III of a previously authorized three-phase expansion. Phases I and II of the expansion were constructed in 2003 and 2004. The Phase III project includes the construction of approximately 24 miles of mainline looping and extensions in Pennsylvania and Delaware, as well as an upgrade of a measuring and regulating station. The project is scheduled to go into service by the end of 2005, according to the company.

The expansion would increase system peak-day capacity to 132,101 Dth/d from 122,925 Dth/d, a Chesapeake Utilities official said.

Chesapeake Utilities said the 2005 investment associated with the expansion project is expected to be $14 million. The company said it has entered into an agreement in principle to borrow $20 million, in the form of unsecured senior notes, to finance the expansion project along with other growth opportunities for the company.

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’ natural 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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