Natural gas and propane utility operator Chesapeake Utilities (NYSE: CPK ) announced yesterday that as of May 31 it had completed the acquisition of Eastern Shore Gas (ESG) along with its affiliate Eastern Shore Propane (ESP), both indirect, wholly owned subsidiaries of Energy Equity Partners that provide propane gas to residents of Worcester County, Md.
Chesapeake subsidiary Sandpiper Energy will operate ESG while subsidiary Sharpgas will operate ESP's assets. Management says that because its own interstate natural gas pipeline operations have already made major expansionary moves into Worcester County, it will look to convert ESG's propane facilities into natural gas.
Chesapeake Utilities CEO Michael P. McMasters said: "The acquisition of the operating assets of ESG by Sandpiper Energy is a key next step in our growth strategy, enabling us to significantly expand our footprint in Worcester County. ... Over the next few months, we will evaluate the potential conversion of the ESG facilities from propane to natural gas. We will proceed with conversions where economically feasible."
ESG provides propane service to approximately 11,000 residential and commercial customers primarily in Ocean City, West Ocean City, Ocean Pines, Berlin, Pocomoke, and Snow Hill. ESP provides propane bulk delivery service via individual propane tanks to more than 500 customers throughout Worcester County.
Financial terms of the acquisition were not disclosed.