July 11, 2012 05:03 PM Eastern Daylight Time 

UGI Energy Services announces plans to supply LNG as a fuel for drilling operations in the Marcellus Shale region

WYOMISSING, Pa.--(BUSINESS WIRE)--UGI Energy Services, Inc. today announced that it will provide liquefied natural gas (LNG) to fuel drilling rigs active in the Marcellus Shale region. The LNG will displace diesel currently used to fuel power generation equipment at the rig site.

 “UGI Energy Services is pleased to supply LNG as a fuel for drilling operations; and we are also proud to partner with EQT Corporation which recently launched a pilot program to begin converting drilling rigs from diesel to LNG,” said Matthew Dutzman, Vice President of Business Development. “LNG is significantly lower in cost and reduces emissions compared to diesel fuel; and we look forward to providing LNG for drilling operations throughout the Marcellus region.”

UGI Energy Services also intends to provide LNG to truck fleets and industrial facilities as an alternative to diesel and other petroleum products. According to Dutzman, “With natural gas prices expected to be low relative to oil for the foreseeable future, cleaner burning LNG is a highly economical alternative for more remote oil-burning industrial facilities that do not have access to piped natural gas, and for truck fleets that use large quantities of diesel fuel.” Fleets with large tractor trailers (e.g., Class 8) consider LNG a very attractive alternative fuel to diesel given its low cost and inherent environmental qualities, as well as an attractive option to CNG given LNG’s superior driving range.

UGI LNG, Inc. (UGI LNG), a subsidiary of UGI Energy Services, Inc., operates a FERC certificated LNG storage facility near Reading, Berks County, Pennsylvania (the Temple Facility). UGI LNG has the capability to both liquefy natural gas and store over 15 million gallons of LNG at the Temple Facility. As a contract capacity holder in the Temple Facility, UGI Energy Services believes that it can provide the most economic source of LNG available to serve growing markets for alternative natural gas-based fuels given the proximity of the Temple Facility to dense population areas, rural industrial companies and the prolific gas-producing Marcellus and Utica Shale regions of Pennsylvania, New York, Ohio and West Virginia.

According to Louis James, Director of Business Development for UGI Energy Services, “UGI Energy Services provides LNG customers with a full range of services including: project conception and system design, construction management, risk management (gas price hedging), LNG transportation options, and operation and maintenance of the on-site customer system.”

About UGI Energy Services, Inc.

UGI Energy Services, Inc. owns 14.7 BCF of underground natural gas storage in north-central Pennsylvania, operates LNG and propane/air peaking plants in Pennsylvania, and is developing midstream projects throughout the Marcellus Shale region. UGI Energy Services also markets natural gas, electricity and liquid fuels to over 10,000 commercial and industrial customers at more than 30,000 locations in eight eastern states and Washington, D.C. and owns electric generation assets in Pennsylvania. UGI Energy Services is a wholly-owned subsidiary of UGI Corporation (NYSE: UGI), a distributor and marketer of energy products and services that, in addition to UGI Energy Services, operates natural gas and electric utilities in Pennsylvania and distributes propane both domestically and internationally.

Comprehensive information about UGI Energy Services is available on the Internet at http://www.ugies.com.

Contacts

UGI Energy Services, Inc.
Industry Contact:
Louis James, 610-373-7999, ext. 174
or
Investor Contacts:
Hugh J. Gallagher, 610-337-7000, ext. 1029
Simon Bowman, 610-337-7000, ext. 3645