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Chesapeake Utilities to Build $80M in LNG Projects On Maryland's Eastern Shore

Wed November 01, 2023 - Northeast Edition #24
Delaware Business Times

Chesapeake Utilities, based in Dover, Del., is planning to invest in building a $80 million liquified natural gas (LNG) storage facility on Maryland's Eastern Shore and make other infrastructure improvements as part of a larger plan to increase capacity on the Delmarva peninsula.

Delaware Business Times reported Oct. 25 that the Worcester Resiliency Upgrade project includes a natural gas storage facility in Bishopville, Md., that will include five 100,000-gal. horizontal tanks next to an existing facility off U.S. Highway 113.

The 135-acre site will store a total of 475,000 gal. and would be able to convert and ship out 14,000 dekatherms of fuel.

Construction is anticipated to start in March 2025, pending regulatory approval.

"Demand for natural gas continues to increase in our Delmarva service territories, where our customer additions are above national averages," Chesapeake Utilities CEO and President Jeff Householder said in a statement. "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."

Plans filed with federal regulators by Eastern Shore Natural Gas Co., a transmission subsidiary of Chesapeake Utilities, show that the LNG would be hauled in tank trucks. The existing Bishopville equipment would be renovated to include offloading equipment.

In Delaware, Chesapeake Utilities also will upgrade a pressure control station in Millsboro, replace an existing meter and regulation station in Selbyville, and build 1.4 mi. of natural gas pipeline through Delmar that would connect to the existing pipeline. The utility also plans to lay pipes for one third of a mile between the Millsboro control station and the existing pipeline in Milford.

Additionally, the Worcester Resiliency Upgrade project includes other improvements to facilities in Worcester County and Somerset County, Md., new pipeline in Bishopville as well as the installation of a valve and in-line receiver in Delmar, according to Delaware Business Times.

Chesapeake Utilities representatives noted in a news release that the project aims to improve reliability and flexibility for its utility network and meet the need for growing demand in the area. Not only is the company seeing steady growth as natural gas heats homes in the winter months, but it also anticipates demand to continue to rise in residential, industrial, and commercial areas south of Smyrna, Del.

Local distribution companies under Chesapeake — Chesapeake Utilities Delaware, Chesapeake Utilities Maryland and Sandpiper Energy — have a 30-year service agreement to distribute natural gas once the Worcester Resiliency Upgrade project is complete.

"Chesapeake Utilities Corporation continues to expand its operations to meet the growing demand for natural gas," Beth Cooper, Chesapeake's chief financial officer and executive vice president, explained in the company statement. "While doing so, [we are] committed to meeting and surpassing the expectations of [our] stakeholders [and] investors. 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."

Over the past several years, Chesapeake Utilities has launched several projects to meet growing demand for natural gas — particularly in the Delmarva Peninsula — such as the Southern Expansion project, which added another natural gas-fired compressor unit in Sussex County at its Bridgeville facility.

Other Delaware projects include extending almost 6 mi. of pipe in the northern end of Ocean City, Md., from Sussex County through to Fenwick Island.

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