Energy Equity Partners Sells Propane Assets

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
0MM
Description

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. for an undisclosed amount.
Both Eastern shore and its affiliate are wholly-owned subsidiaries of Energy Equity Partners LP. Based in Worcester County, Maryland, Eastern Shore Gas provides propane distribution service to approximately 11,000 residential and commercial customers in Worcester County, Maryland, primarily in Ocean City, West Ocean City, Ocean Pines, Berlin, Pocomoke and Snow Hill. The propane distribution services are provided from central storage facilities through underground gas distribution mains and services very similar to a natural gas distribution system.
Eastern Shore Propane provides propane bulk delivery service via individual propane tanks to over 500 customers throughout Worcester County. "Chesapeake is in the process of evaluating the potential conversion of some of the facilities of Eastern Shore Gas from propane to natural gas. Where economical and feasible, Chesapeake expects to undertake such conversions," says Chesapeake vice president Jeffrey R. Tietbohl.
The transaction expands Chesapeake Utilities' distribution system operations on the Eastern Shore of Maryland and adds over 11,500 new customers, almost doubling Chesapeake Utilities' current 12,800 natural gas distribution system customers served in Maryland.
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, MD. 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's Maryland Division currently provides natural gas distribution service to customers in Wicomico, Dorchester and Caroline Counties.
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 the fourth quarter 2012.