Piedmont's Pipeline for Progress - Analyst Blog

Piedmont Natural Gas (PNY) and Progress Energy Carolinas, a subsidiary of Progress Energy Inc. (PGN), signed an agreement wherein Piedmont will supply natural gas to PGN’s power generation facility to be built at its existing Sutton site near Wilmington, North Carolina. 

 

Piedmont will construct approximately 133 miles of transmission pipeline and install 23,000 horsepower of new compression facilities to serve the new 620 MW combined-cycle Sutton plant. Piedmont plans to invest $217 million in the pipeline and compression facilities.

 

The new natural gas facilities will not only serve Progress Energy Carolinas' requirements at its new Sutton plant but will also create cost effective expansion capacity that Piedmont will use to help serve the growing natural gas requirements of its other customers in the eastern part of North Carolina.

 

Piedmont will begin construction of the new natural gas pipeline and compression facilities early in 2011 and will have them ready for service in June 2013.

 

As the Sutton project will help serve the needs of Piedmont's growing natural gas customer base in the eastern part of North Carolina in a more cost effective manner, Piedmont said that the project alleviates the need for it to pursue any further development of its previously announced Robeson liquefied natural gas (LNG) storage project. 

 

The Robeson project was put on hold by the company in March 2009 pending further evaluation of its growth requirements in the eastern part of North Carolina and the timing of natural gas infrastructure to serve that growth. Although work on the storage project will be suspended indefinitely, Piedmont expects to invest $60 million of the $217 million Sutton project in Robeson County.

 

Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee, including 61,000 customers served by municipalities who are wholesale customers.

 

Raleigh, North Carolina-based Progress Energy Inc. is an energy utility engaged in regulated electricity operations in the southeastern U.S. as well as non-regulated businesses. Progress Energy is a holding company, comprising two electric utilities serving 3.1 million customers in North Carolina, South Carolina and Florida. The company has a generation capacity of more than 22,000 megawatts (MW) and $9.9 billion in annual revenues.