UGI (NYSE:UGI) has entered into an agreement with Citrus Energy Corporation to gather by pipeline Marcellus Shale natural gas produced by Citrus in Wyoming County, Pennsylvania, for delivery to Tennessee Gas Pipeline Company's interstate pipeline in Susquehanna County.
UGI Energy Services will acquire and construct facilities to handle up to 120,000 dekatherms per day. Subject to permitting and regulatory approvals, service is expected to begin as early as spring 2011.
Peter Terranova, UGI Energy Services’ vice president of midstream assets and services, said, “This is our first project to provide gas gathering infrastructure to Marcellus natural gas producers. It signals UGI's commitment to provide Marcellus producers multiple avenues to serve high value markets efficiently and bring plentiful, competitively priced, locally produced natural gas to consumers.”
UGI previously announced that it plans to invest approximately $300 million over the next two years on midstream projects to support the development of natural gas infrastructure in the Marcellus Shale region. Among these investments are the recently announced agreement between UGI Energy Services and NiSource Gas Transmission and Storage (NGT&S) to market and develop a major pipeline project to provide Marcellus Shale producers in Pennsylvania improved access to high-value markets.
UGI Energy Services markets natural gas, electricity, and fuel oil to over 8,000 commercial and industrial customers at over 25,000 locations throughout the mid-Atlantic region, owns and operates natural gas storage in the Marcellus Shale region and peaking plants for utility clients, and owns 112 megawatts of electric generation capacity, as well as another 125 megawatts of gas fired generation under construction.
UGI is a holding company with propane marketing, utility and energy marketing subsidiaries. Through subsidiaries, UGI owns 44% of AmeriGas Partners, L.P., the nation's largest retail propane marketer, and owns Antargaz, one of the largest LPG distributors in France.