Meeting the Energy Needs of Hampton Roads Residents: New Pivotal Propane of Virginia Facility In Chesapeake Adds to Region’s Energy Supply

October 26, 2004

CHESAPEAKE, VA – October 26, 2004 – A new energy storage and delivery facility is being constructed to ensure that Hampton Roads residents will have adequate supplies of natural gas on cold winter days.

This facility is being built in support of Virginia Natural Gas (VNG) by its affiliate company, Pivotal Propane of Virginia, a subsidiary of AGL Resources. The Pivotal Propane facility with a total investment of $27 million will not only supplement the available winter supplies for VNG customers but will also represent a significant long-term investment in the revitalization of Chesapeake’s waterfront industrial corridor.

“As the population of the Hampton Roads area has grown, so has demand for natural gas,” said Hank Linginfelter, president of VNG. “In order to keep pace with this growth, we have looked at ways to expand our capacity to serve residential, commercial and industrial customers in our territory.”

The Pivotal facility is designed to meet VNG’s need for “peak day” and winter season deliveries. The completed facility will store liquid propane gas until it is needed to supplement natural gas supplies on cold winter days, when demand is high. The propane plant is being constructed at the former Smith-Douglass Company site in Chesapeake.

“The redevelopment of this former manufacturing facility along Chesapeake’s waterfront corridor is a positive step for the economic growth of the area,” said John Ebert of Pivotal. “In addition to our removing the existing dilapidated buildings and other surface debris, we have invested in the removal and cleanup of soil contaminated by previous discontinued operations. We have done considerable site work this past spring in preparation for construction to commence this summer. Currently we are on schedule to complete the initial phase of the plant in December and have it fully operational in January in time to meet VNG’s heating needs this winter.”

Approximately 60 contractors are working during the construction phase. Once the plant is operational, site conditions and facility operations will be monitored 24 hours a day. The facility will contribute to the tax base of the community both in terms of both capital investment and future property taxes.

Facility Description
The Chesapeake plant will function as a “peak shaving facility.” On those extremely cold days when there is a high demand for natural gas, stored liquid propane will be vaporized and mixed with air before being blended with natural gas in the VNG distribution system.

The new facility was designed to provide enough additional capacity to cover VNG’s peak day growth for the next three years, with the capability for expansion to provide capacity for peak day growth over an additional seven years.

Commitment to Safety
Pivotal is committed to a safe and efficient operation of its facility. Similar propane facilities in Chesapeake and James City County have been in operation safely for 45 years. Pivotal is working closely with local officials to ensure this performance record is maintained through the incorporation of the most current industry and local safety standards.

Once construction is complete, Pivotal will continue to communicate information about the plant’s start-up and any other activities that may be of interest to the community.

For additional information, contact the community office at 757-466-5555 or visit www.pivotalpropane.com.