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UGI opens direct-from-Marcellus pipeline

By , - Last modified: December 19, 2011 at 11:51 AM

Natural gas utility UGI Central Penn Gas Inc. has opened the first dedicated "interconnect" pipeline transporting gas from Pennsylvania Marcellus Shale gas wells directly to Pennsylvania customers.

A ceremony Friday marked the debut of the pipeline, which supplies about 15,000 UGI customers in northeastern Pennsylvania.

Similar pipelines bringing Marcellus gas to the midstate and eastern Pennsylvania can be expected soon, UGI spokesman Joseph Swope said, echoing comments made to the Business Journal this summer by UGI's Mike Love.

"This is the kind of infrastructure that needs to develop over the next couple of years," Swope said.

Sourcing gas directly from the Marcellus drastically reduces transportation costs, which account for about one-third of the price, he said.

Midstate customers already are enjoying substantially lower natural gas prices thanks to Marcellus development, Swope said. Prices for UGI customers have dropped 30 percent over three years, he said.

If UGI purchased all the Marcellus gas coming to market, it could fill its yearly demand in 13 days, Swope said.

UGI Central Penn Gas Inc. is a subsidiary of Reading-based UGI Utilities Inc., whose subsidiaries supply natural gas to roughly 570,000 customers in central and eastern Pennsylvania.

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