Chesapeake Utilities to invest $80M in LNG projects
DOVER — Chesapeake Utilities is planning a $80 million liquified natural gas storage facility on Maryland’s Eastern Shore and other infrastructure improvements as part of a larger plan to increase capacity on the Delmarva peninsula.
The Worcester Resiliency Upgrade project includes a natural gas storage facility in Bishopville, Md., that will have five 100,000-gallon horizontal tanks next to an existing facility off the U.S. Route 113. The 135-acre site will store 475,000 gallons in total, and would be able to convert and ship out 14,000 dekatherms of fuel. Construction is anticipated to start in March 2025, pending regulatory approval.
“Demand for natural gas continues to increase in our Delmarva service territories, where our customer additions are above national averages,” Chesapeake Utilities CEO and President Jeff Householder said in a statement. “Strategic infrastructure investments like this one allow us to enhance service for our existing customers, meet growing demand and support future growth opportunities in our expanding areas of operation. We believe we are well positioned to serve existing and future customers.”
Plans filed with federal regulators by Chesapeake Utilities transmission subsidiary Eastern Shore Natural Gas Company show that the liquified natural gas would be driven in tank trucks. The existing Bishopville equipment would be renovated to include offloading equipment.
In Delaware, Chesapeake Utilities will upgrade a pressure control station in Millsboro, replace existing meter and regulation station in Selbyville and build 1.4 miles of natural gas pipeline through Delmar that connects to the existing pipeline. The utility also plans to lay pipe for a third of a mile between the Millsboro control station and the existing pipeline in Milford.
Worcester Resiliency Upgrade project includes other improvements to facilities in Worcester County and Somerset County, Md., new pipeline in Bishopville, as well as constructing a valve and in-line receiver in Delmar.
Chesapeake Utilities representatives said the project is needed to improve reliability and flexibility for its utility network, as well as meeting the need for the growing demand. Not only is the company seeing steady growth as natural gas heat homes in the winter months, it’s anticipating demand to continue to rise in residential, industrial and commercial areas south of Smyrna.
Local distribution companies under Chesapeake — Chesapeake Utilities Delaware, Chesapeake Utilities Maryland and Sandpiper Energy — have a 30-year service agreement to distribute natural gas once the Worcester Resiliency Upgrade project is complete.
“Chesapeake Utilities Corporation continues to expand its operations to meet the growing demand for natural gas. While doing so, the company is committed to meeting and surpassing the expectations of its stakeholders, including investors,” Chesapeake Utilities Chief Financial Officer and Executive Vice President Beth Cooper said. “This project supports our recent capital guidance increase, which builds on our long track record of identifying and executing on strategic growth initiatives that drive future earnings growth.”
Over the past several years, Chesapeake Utilities has launched several projects to meet growing demand for natural gas, particularly in the Delmarva Peninsula, such as the Southern Expansion project, which added another natural gas-fired compressor unit in Sussex County at its Bridgeville facility.
That addition is expected to add $600,000 this year and $2.3 million in 2024 in revenue, according to filings with the U.S. Securities and Exchange Commission.
Other Delaware projects include extending almost 6 miles of pipe in north Ocean City, Md., from Sussex County, coming through Fenwick Island. Chesapeake Utilities expects this expansion to bring $200,000 in revenue per year.
Headquartered in Dover, Chesapeake Utilities has also been focusing efforts on Florida in the last couple of years. In 2009, the utility company bought Florida Public Utilities which brought 3,000 miles of distribution mains in the network as well as 87,000 customers. Last month, the utility company announced it would acquire Florida City Gas for $932 million, which would more than double the utility company’s presence in the Sunshine State.