US-based power utility Duke Energy has acquired a 7.5% stake in the $3bn Sabal Trail natural gas pipeline that passes through the Alabama, Georgia and Florida.
The utility intends to invest $225m for the stake in the underground pipeline over the next seven years and 90% of which will be spent in the coming three years.
Extending over 500 miles, the pipeline will start from Tallapoosa County in Alabama to Osceola County in Florida.
Spectra Energy and NextEra Energy are the other two owners for the pipeline which is expected to be operational from 2017.
The proposed pipeline awaits approval from federal and other regulatory bodies, which are likely to be secured in early 2016.
Construction work for the natural-gas pipeline, which will have a delivery capacity of around 1.1 billion ft3, is expected to start by 2016.
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By GlobalDataDuke Energy commercial transmission vice president Phil Grigsby said: "The Sabal Trail pipeline will benefit Duke Energy’s Florida customers by supplying a stable, reliable supply of low-cost natural gas to generate electricity.
"Today, only two major natural gas pipelines supply the entire state of Florida. A third pipeline, Sabal Trail, is essential to meet the increasing energy needs of Florida’s growing population and economy.
"Duke Energy’s investment in the pipeline further expands the company’s commitment to build critical natural gas pipeline infrastructure in the Southeast US, where natural gas has become an important fuel that provides significant environmental benefits."
It is expected to benefit natural gas-fired power plants, natural gas distribution companies, manufacturing plants and other industrial users once operational.
Duke Energy Florida and Florida Power & Light Company are two major customers for the pipeline supply, among others. The firms have signed contracts for 25-year initial terms.
The firm will use the supply from the pipeline for its $1.5bn power facility in Citrus County, Florida which is likely to be commissioned in 2018.
The Sabai Trail pipeline is the second interstate natural gas pipeline investment by the firm in eight months, the first being the proposed 550 mile Atlantic Coast Pipeline from West Virginia to North Carolina.
Image: Construction for the natural-gas pipeline is likely to start by 2016. Photo: courtesy of John Kasawa / FreeDigitalPhotos.net
