UGI Corp., a Valley Forge energy business, is developing its Natural Gas pipeline network in Pennsylvania’s Marcellus Shale region, demonstrating the continued need for fossil fuels. Stonehenge Appalachia, a 47-mile pipeline in Butler County that distributes Natural Gas produced from local wells to interstate pipelines, was purchased by UGI Energy Services LLC for $190 million on Tuesday.
UGI has grown its footprint in the shale-gas region northeast of Pittsburgh three times in the last several years. Columbia Midstream Group LLC, a 240-mile system in Butler, Armstrong, and Indiana Counties that includes the Big Pine pipeline, was purchased for $1.3 billion in 2019. UGI also purchased a 49 percent stake in the Pine Run Midstream system last year, which, like the Stonehedge pipeline, is linked to the bigger Big Pine system.
The three pipelines together comprise a “midstream system,” which connects individual well collection pipelines to huge interstate pipelines that transport fuel to distant, major consumers such as power plants and local utilities. Midstream pipeline networks, which have long-term users and operate mostly outside of public view, are reliable cash flow generators for corporations like UGI. This investment is in line with our aim of generating continuous earnings growth while continuing to rebalance the business activities by expanding Natural Gas and renewable energy investments.
In Pennsylvania, Ohio, and West Virginia, the UGI Energy Services business manages around a dozen gas pipelines, as well as multiple liquefied Natural Gas production plants, gas power plants, a gas storage facility, and 21 solar farms. It was also the operator and 20% owner of the $1 billion PennEast Pipeline project, which was cancelled last year due to public resistance and a promise by New Jersey officials to stop it from being built all the way to its terminus near Trenton.