Chesapeake Utilities Corporation Announces $80 Million Investment to Support Growing Energy Demand on the Delmarva Peninsula

Rhea-AI Summary

Chesapeake Utilities subsidiary to invest $80 million in liquefied natural gas storage facility

Positive

• Chesapeake Utilities plans to invest $80 million in the Worcester Resiliency Upgrade project
• The project includes a liquefied natural gas storage facility in Bishopville, Maryland
• ESNG will construct, own, and operate all proposed facilities
• The project will enable ESNG to provide critical energy service during the peak winter heating season
• Three affiliated local distribution companies will enter into 30-year service agreements
• The project aligns with the Company's sustainability strategy

Negative

• None.

DOVER, Del., Oct. 18, 2023 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) today announced that its subsidiary, Eastern Shore Natural Gas Company (ESNG), plans to invest $80 million in the Worcester Resiliency Upgrade project, a planned liquefied natural gas storage facility in Bishopville, Maryland. The proposed peaking storage facility will include five low-profile 100,000-gallon horizontal storage tanks on a 135-acre parcel adjacent to an existing industrial facility in Worcester County. The project also includes additional infrastructure in Sussex County, Delaware, and Wicomico County, Maryland, as well as upgrades to existing meter and regulator stations in Sussex County, Delaware; Worcester County, Maryland; and Somerset County, Maryland. ESNG will construct, own and operate all proposed facilities. The project will enable ESNG to provide critical energy service to customers during the peak winter heating season.

The $80 million capital investment is a result of the increased capacity requirements of three affiliated local distribution companies (LDCs), each of which will enter into 30-year service agreements upon completion of the project. The project also aligns with the Company's sustainability strategy, focusing on the safety and sustainability of local communities and the environment.

"Demand for natural gas continues to increase in our Delmarva service territories, where our customer additions are above national averages," said Jeff Householder, chairman, president and chief executive officer. "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."

"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," said Beth Cooper, executive vice president, chief financial officer, treasurer and assistant corporate secretary. "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."

The Worcester Resiliency Upgrade will enhance the natural gas supply system on the lower eastern shore of Maryland and in southern Delaware. The project will provide an alternative supply source and enhance the system's flexibility during critical peak months, reducing the risk of supply interruption and improving reliability. These improvements will help protect customers from weather-related disruptions, keeping energy prices affordable.

Over the past several years, the Company has executed significant projects to meet continuing customer growth and demand for energy in underserved regions on the Delmarva Peninsula, including infrastructure expansion on the lower eastern shore of Maryland and in southern Delaware. These projects have facilitated the availability of natural gas in Somerset County, one of three counties in Maryland previously without access to natural gas. As a result, two large energy consumers were able to transition from less sustainable heating sources to natural gas, improving their environmental emissions profiles. Most recently, to meet the ongoing demand, ESNG completed its Southern Expansion project, which included the addition of another natural gas-fired compressor unit in Sussex County at its Bridgeville, Delaware, compressor facility.   

An application for the Worcester Resiliency Upgrade was filed with the Federal Energy Regulatory Commission in Docket No. CP23-536-000. The project is expected to be operational before the winter heating season of 2025, pending receipt of regulatory approvals.

For more information, visit WorcesterResiliencyUpgrade.com.

About Eastern Shore Natural Gas Company (ESNG)
Eastern Shore Natural Gas Company owns and operates a 516-mile Federal Energy Regulatory Commission (FERC) regulated interstate transmission pipeline system that transports natural gas from four upstream pipeline interconnection points in Pennsylvania and Delaware to customers along the Delmarva Peninsula, including Chesapeake Utilities' distribution systems. For more information, visit www.esng.com.

About Chesapeake Utilities Corporation
Chesapeake Utilities Corporation is a diversified energy delivery company, listed on the New York Stock Exchange. Chesapeake Utilities Corporation offers sustainable energy solutions through its natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, mobile compressed natural gas utility services and solutions and other businesses. For more information, visit www.chpk.com.

Please note that Chesapeake Utilities Corporation is not affiliated with Chesapeake Energy, an oil and natural gas exploration company headquartered in Oklahoma City, Oklahoma.

For more information, contact:

Investors
Beth W. Cooper, Chesapeake Utilities Corporation
Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary
302-734-6022

Michael Galtman, Chesapeake Utilities Corporation
Senior Vice President and Chief Accounting Officer
302-217-7036

Media
Brianna Patterson, Chesapeake Utilities Corporation
Manager, Public Relations and Strategic Communications
419-314-1233
bpatterson@chpk.com

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SOURCE Chesapeake Utilities Corporation

FAQ

What is the investment amount for the Worcester Resiliency Upgrade project?

The investment amount for the project is $80 million.

Where will the liquefied natural gas storage facility be located?

The facility will be located in Bishopville, Maryland.

Who will construct, own, and operate the proposed facilities?

ESNG will construct, own, and operate all proposed facilities.

What is the purpose of the project?

The project aims to provide critical energy service during the peak winter heating season.

How long will the service agreements be for?

The affiliated local distribution companies will enter into 30-year service agreements.

Does the project align with the Company's sustainability strategy?

Yes, the project aligns with the Company's sustainability strategy.