April 24, 2013

Summit makes key deals with central Maine gas buyers

A pair of businesses agree to use natural gas from Summit as service enters Augusta and Waterville.

By DOUG HARLOW Morning Sentinel

SKOWHEGAN – Summit Natural Gas of Maine announced Tuesday that it has signed up a second anchor customer – Sappi Fine Paper's Somerset mill in Skowhegan – in its northward push to provide service in the Kennebec Valley.

The Sappi mill and Huhtamaki Inc. of Fairfield and Waterville reached agreements in principle in recent days with Summit, which is competing with Maine Natural Gas to be the dominant gas provider in the region.

Summit is scheduled to begin construction of its natural gas transmission and distribution system early next month, according to a statement released Tuesday.

"The opportunity to utilize natural gas is essential to maintain the competitive cost position of our Somerset Mill and is another example of our investment in the state of Maine," said Mark Gardner, Sappi's president and chief executive officer. "We look forward to working with Summit to establish access to clean, economical natural gas, which we foresee will ultimately reduce fuel costs, be better for the environment, and ensure the long-term profitability of our operations."

Summit's investment of $350 million in pipeline infrastructure will create an estimated 435 jobs, according to its press release. Summit plans to serve about 15,000 residential, commercial and industrial customers by its third year of operation.

Skowhegan Town Manager John Doucette Jr. said by landing the two businesses -- Sappi and Huhtamaki -- Summit establishes itself as the primary player for natural gas distribution.

"For this area, this is really big," Doucette said Tuesday. "Summit not only wants to handle the anchors, but they're also looking for residential markets. They are the one natural gas company that has looked at that."

Doucette said he expects natural gas to be available soon to what he calls the secondary anchor market -- local manufacturing plants, the hospital and schools -- now that the two major players are in place.

From there, he said, residential customers are next in line, perhaps four or five years down the line.

"It's going to be a very positive thing for the whole area," Doucette said. "It gives us another source of energy to use."

Summit's competitor, Maine Natural Gas, whose parent company, Iberdrola USA, owns Central Maine Power, has committed itself to offering gas to 70 percent of households and small businesses by 2015, but only in Augusta, according to published reports.

The company has proposed a $50 million project serving municipal, school, county and court facilities in Augusta, making gas available to more than 7,500 customers.

Sappi's participation in the project is subject to certain corporate capital approvals, as well, according to the press release.

"Sappi is one of the largest employers in Maine," said Tim Johnston, Summit's executive vice president and chief strategy officer. "This service agreement would provide us with an important commitment to advance our effort to deliver natural gas to central Maine."

The same applies for Huhtamaki, Summit President Mike Minkos said.

Kenneth Young, executive director at Kennebec Valley Council of Governments, said the agreements with Sappi and Huhtamaki are good news to the entire Kennebec Valley region. He said the agreements, once completed, are critical to the pace of bringing natural gas all the way to the paper mill in Madison.

Madison Town Manager Dana Berry on Tuesday said there has been no agreement for natural gas to come to Madison.

 

Doug Harlow can be contacted at 612-2367 or at:

dharlow@centralmaine.com

 

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