UGI Energy Services LLC (UGIES), the midstream and energy marketing subsidiary of UGI Corp. (NYSE: UGI), has completed two midstream projects. UGIES has completed its Union Dale Pipeline project consisting of six miles of 12-inch pipeline and two interconnection facilities. The project is a direct link between abundant and locally produced natural gas supplied by Cabot Oil & Gas Corp. to the UGI Penn Natural Gas Inc. (UGI PNG) distribution system. The project is capable of delivering 100,000 dekatherms per day directly into UGI PNG.
Additionally, UGIES has completed Phase 1 of a two-phase expansion of its Auburn Gathering System with the construction of three additional compressor units at its Manning Compressor Station in Wyoming County, Pennsylvania, and a new interconnection facility. The completed project adds 50,000 dekatherms per day of capacity to UGI PNG and Transcontinental Gas Pipe Line Co. Construction of Phase 2, including the Auburn Loop project, is expected to begin in the spring of 2015 and will add 150,000 dekatherms per day. Cabot has executed a long-term agreement for the expansion capacity.
These two projects mark a critical milestone for certain consumers served by UGI PNG. Both projects enable UGI PNG customers in the Scranton/Wilkes-Barre area to be nearly 100% directly supplied by locally-produced Marcellus shale natural gas through state-of-the-art transportation facilities built and operated by UGIES for the upcoming winter season. Customers have been realizing significant cost benefits from natural gas use since 2008 and will continue to realize added benefits through lower transportation and commodity costs offered through these projects.