VALLEY FORGE, Pa. (Feb. 17, 2015) – UGI Corporation (NYSE: UGI) today announced that a subsidiary of its wholly-owned subsidiary, UGI Energy Services, LLC, plans to construct an approximately 35-mile pipeline to bring low-cost natural gas produced in the Marcellus Shale region to a planned 1,000-megawatt natural gas-fueled power generation facility near Shamokin Dam in Snyder County, Pennsylvania. Panda Power Funds and Sunbury Generation LP plan to construct the new “Hummel Station” power plant on the site of Sunbury Generation LP’s existing coal-fired plant that has been retired from operation.
The new Hummel plant is expected to be operational in the second half of 2017. In addition to serving the generation plant, the new pipeline will supply natural gas and system reinforcement to distribution systems operated by UGI Penn Natural Gas, Inc. and UGI Central Penn Gas, Inc.
Later this year, UGI Sunbury, LLC, a wholly-owned subsidiary of UGI Energy Services, LLC, will file for approval to construct and operate the pipeline from the Federal Energy Regulatory Commission (FERC), the agency that regulates transportation of natural gas through interstate markets. The 20-inch diameter, steel pipeline will be designed to transport 200,000 Dth per day of natural gas. It is expected to cost approximately $160 million and to be in service in early 2017.
“Power generators in the Northeast and Mid-Atlantic are moving to local natural gas as the fuel of choice because it is a clean, abundant and affordable resource that reduces carbon emissions and complies with stringent air-quality rules,” said UGI President and CEO John Walsh. “This project serves to meet the growing demand for natural gas from power generators, while providing greater system reliability and enhancing natural gas availability for our expanding customer base in communities across central and northeast Pennsylvania served by UGI Penn Natural Gas and UGI Central Penn Gas.”
“We are proud to be a part of this exciting project along with UGI Sunbury and Panda Power Funds to provide natural gas supply to Hummel’s state-of-the-art plant,” said David Meehan, President of Sunbury Generation LP. “Our location near the abundant Marcellus shale supply areas has made our site near Shamokin Dam ideal for natural gas-fueled generation, and we are working closely with local communities and the Commonwealth of Pennsylvania to attract other businesses and industries to available land on the site.”
“We look forward to working alongside UGI Energy Services and Sunbury Generation as the lead developer for Hummel Station,” said Todd Carter, president and senior partner of Panda Power Funds. “These projects are good for the community, good for the Commonwealth and great for Pennsylvania Marcellus shale gas producers and royalty owners.”
Additionally, the pipeline and power plant projects are expected to benefit the region’s economy and create jobs. During the construction phase, the two projects combined will create over 800 new jobs.
About UGI Energy Services, LLC
UGI Energy Services is a subsidiary of UGI Corporation. UGI Energy Services markets natural gas, electricity and liquid fuels to approximately 19,000 residential, commercial, industrial, institutional and government customers at approximately 43,000 locations in nine states and Washington, D.C. In addition, it stores and delivers natural gas and generates electricity.
About UGI Corporation
UGI Corporation (NYSE: UGI) is a distributor and marketer of energy products and services. Through subsidiaries, UGI Corporation operates natural gas and electric utilities in Pennsylvania, distributes propane both domestically and internationally, manages midstream energy and electric generation assets in Pennsylvania, and engages in energy marketing in the Mid-Atlantic region. UGI Corporation, through subsidiaries, is the sole General Partner and owns 26 percent of AmeriGas Partners, L.P. (NYSE: APU), the nation’s largest retail propane distributor.
Comprehensive information about UGI Corporation is available on the Internet at http://www.ugicorp.com.