Chesapeake Utilities Corp. (NYSE: CPK) on Aug. 11 announced that the Federal Energy Regulatory Commission approved on July 21 the application by subsidiary Eastern Shore Natural Gas (ESNG) to expand firm natural gas transportation service to Calpine Energy Services‘ Garrison Energy Center in Dover, Delaware.
ESNG will transport 45,000 dekatherms per day (dt/d) of natural gas to service Calpine’s 309-MW plant.
“This project is an example of our ability to provide clean natural gas thereby generating long-term value for our customers, investors, employees and our communities,” said Michael P. McMasters, Chesapeake Utilities President and Chief Executive Officer.
The transportation service will be provided under ESNG’s Off Peak ≤90 Firm Transportation (OPT) Rate Schedule. The OPT is a firm service that was designed to provide customers with an additional offering that better matched the specific load requirements of the customer. Calpine’s Garrison Energy Center has dual-fuel capability to help mitigate the effects of any potential gas interruption.
“This agreement with Calpine exemplifies our continued efforts to meet the energy needs of the region as demand for economic and environmentally friendly natural gas increases,” said Steve Thompson, President of Eastern Shore Natural Gas.
ESNG plans to expand its facilities with the installation of 5.4 miles of 16-inch pipeline looping and 3,550 horsepower of new compression in Delaware. These new facilities are estimated to cost about $38 million. ESNG estimates that it will generate at least $5.8 million of revenue annually from providing the OPT service to Calpine. Since Calpine’s electric generation plant initiated operations in the second quarter of 2015, ESNG has been providing Calpine with a limited mix of short-term service solutions until the facilities associated with this project are completed.
Completion of the facilities are anticipated during the first quarter of 2017.
Chesapeake Utilities is a diversified energy company engaged in natural gas distribution, transmission, gathering and processing, and marketing; electricity distribution; propane gas distribution and wholesale marketing; and other businesses. Eastern Shore Natural Gas owns and operates a 442-mile interstate pipeline that transports natural gas from various points in Pennsylvania to customers in Delaware, Maryland and Pennsylvania.