Chesapeake Utilities Corp., a Delaware-based public utility, plans to purchase the operating assets of Eastern Shore Gas Co. and its affiliate, Eastern Shore Propane Co.
Based in Worcester County, Maryland, Eastern Shore provides propane distribution service to some 11,000 residential and commercial customers in and around Worcester County. The propane distribution services are provided from central storage facilities through underground gas distribution mains and services.
The transaction expands Chesapeake Utilities' distribution system operations on the Eastern Shore of Maryland and adds more than 11,500 new customers, almost doubling Chesapeake Utilities' current 12,800 natural gas distribution system.
In 2011, Chesapeake announced plans to initially extend its natural gas transmission pipeline through its subsidiary Eastern Shore Natural Gas Company (ESNG) to parts of Worcester County. ESNG's construction of the natural gas transmission pipeline in Worcester County is proceeding as planned and is expected to be completed later this summer.
Chesapeake expects to finance the purchase of the Eastern Shore Gas and Eastern Shore Propane operating assets using unsecured short-term debt. The acquisition is expected to be completed in fourth-quarter 2012.
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