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UGI Corporation (NYSE: UGI) today announced that UGI Energy Services, Inc., its midstream and energy marketing subsidiary, has entered into an agreement with Inergy Midstream, L.P. and Capitol Energy Ventures Corp. (a subsidiary of WGL Holdings, Inc.) to jointly market and develop a new interstate pipeline known as the Commonwealth Pipeline. The proposed 200-mile, 30-inch pipeline is expected to transport at least 800,000 dekatherms per day of natural gas when it is placed in service in 2015 and UGI Energy Services and Capitol Energy Ventures Corp. are expected to execute precedent agreements to become anchor shippers on the line.
The Commonwealth Pipeline will extend from the southern terminus of Inergy Midstream’s MARC I pipeline in Lycoming County, Pennsylvania, due south through the UGI Utilities, Inc. service areas in central and eastern Pennsylvania and will continue south to access markets across southeastern Pennsylvania and the Philadelphia, Baltimore and Washington, D.C. metropolitan areas. The pipeline will connect these attractive markets directly to reliable supplies of Marcellus natural gas production from across Pennsylvania while providing a more cost effective transportation path than traditional routes. The pipeline is expected to cross and interconnect with a number of interstate pipelines along its route, resulting in even greater supply diversity while providing producers with direct access to markets that are currently served only through existing interstate pipelines.
Bradley Hall, President of UGI Energy Services, Inc. said, "We are pleased to be working with Inergy and WGL to develop this significant infrastructure project, which will provide direct access to new markets for Marcellus gas producers. Gas production in the region has been limited by the lack of take-away capacity in existing interstate pipelines, most of which currently serve markets outside of Pennsylvania. Our goal in participating in this project is to bring gas produced in Pennsylvania directly to the major markets in central and eastern Pennsylvania."