Eastern Shore Natural Gas Company (ESNG), Chesapeake Utilities’ interstate natural gas transmission subsidiary, has finalized precedent agreements with customers for its 2017 Expansion Project that will add significant firm transportation pipeline capacity in the region.
“This project is the single largest expansion in Eastern Shore Natural Gas’ long history of providing safe, clean, domestic and affordable natural gas,” said Michael P. McMasters, Chesapeake Utilities Corporation President and Chief Executive Officer. “Our company continues to invest in energy infrastructure throughout the Mid-Atlantic area. This project will increase the firm transportation deliverability to our region by approximately 25 percent, supporting economic growth in the region.”
Precedent agreements have been signed by seven of ESNG’s existing customers who have requested new firm transportation services. As a result of this expansion, this project will provide more than 60,000 dekatherms per day of additional firm natural gas transportation deliverability on the pipeline.
“This expansion of firm natural gas transportation capacity is a result of our ongoing commitment to providing new service and supply options for our customers,” said Stephen C. Thompson, President of Eastern Shore Natural Gas Company. “The firm transportation capacity added will position us to meet growing market demand for reliable energy in the region, as evidenced by the record number of customers participating in the project.”
The 2017 Expansion Project consists of approximately 23 miles of pipeline looping in Pennsylvania, Maryland and Delaware; upgrades to existing metering facilities; installation of an additional 3,550 horsepower compressor unit at the existing Daleville Compressor Station in Chester County, Pennsylvania; and approximately 17 miles of new mainline extension and the addition of two pressure control stations in Sussex County, Delaware. These new facilities are estimated to cost about $99 million. ESNG estimates that it will generate gross margin of approximately $15.7 million in the first full year after the new transportation services go into effect.
ESNG intends to file its formal certificate application for the 2017 Expansion Project with the Federal Energy Regulatory Commission (FERC) in the fourth quarter of 2016, pending the completion of its ongoing pre-filing regulatory process at the FERC. Subject to the timing of FERC approval, ESNG intends to commence construction of the expansion project in the second quarter of 2017 and place the facilities in service during the latter part of the fourth quarter of 2017.