Gas Natural Inc. has closed on its acquisition of a leasehold interest in a 189-mile pipeline corridor easement in Maine that runs from Searsport to Limestone and various parcels of land, the Mentor, OH-based holding company said Friday. The $4.5 million deal, which included $2.25 million in cash and 210,951 shares of the company’s common stock valued at $10.67/share, closed Sept. 25.
“Maine has long been identified as a strategic growth market due to the low penetration of natural gas as an energy source for power generation, industry and residential use,” said Gas Natural CEO Richard M. Osborne. “The predominate energy source in Maine is higher cost oil-based fuels. This acquisition represents a significant investment and expansion of our systems in Maine, and complements our existing service area, as the pipeline stretches from the eastern coast into northern Maine, crossing through our natural gas service area in Bangor.
The assets, which include a liquid pipeline previously owned by Loring BioEnergy LLC, were purchased at a public foreclosure auction in June. The company plans to recondition and convert the Loring pipeline into a natural gas pipeline.
“We have successfully converted a former liquid pipeline to natural gas uses in Ohio and given that experience, we expect we can be equally successful in the recondition and conversion of the Maine assets. The conversion of this pipeline will be done in phases, and we believe will position us well to capture additional opportunities, specifically the industrial base in northern Maine as well as accompanying residential and commercial areas where natural gas is currently not available.”
In addition to operations including interstate pipelines, natural gas production, propane and natural gas marketing, Gas Natural distributes natural gas to about 70,000 customers through regulated utilities operating in Montana, Wyoming, Ohio, Pennsylvania, Maine, North Carolina and Kentucky.
A special state appeal panel recently invalidated the selection by Maine’s Bureau of General Services of a proposal by Maine Natural Gas to build an 80-mile-long natural gas pipeline to the state capital, Augusta, and the surrounding Kennebec Valley, southwest of Gas Natural’s planned pipeline (see Daily GPI, Sept. 17).
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