Oct. 24--A liquefied natural gas manufacturing and storage subsidiary of UGI Energy Services, Spring Township, announced Friday that it has awarded a contract of more than $100 million to expand its Ontelaunee Township facility.

UGI LNG Inc. selected Chicago Bridge & Iron, Plainfield, Ill., to construct a facility next to the existing storage unit that would increase capacity from 4 billion gallons of liquefied natural gas to 15 billion to 16 billion gallons at its plant at 5665 Leesport Ave. in the township.

The project will cost a little more than $100 million, but Mike Mara, director of project development for UGI LNP, said it probably wouldn't cost much more than that.

The plant processes and stores liquefi ed natural gas during the summer and releases natural gas into the pipeline in the winter when demand is at its peak, according to Matthew Dutzman, vice president of business development at UGI Energy Services.

The 37-year-old plant connects directly into the Texas Eastern pipeline to provide gas supplies for the Mid-Atlantic and Northeast markets.

Liquefying natural gas, storing it and returning it to its natural gas state is more economical than building pipelines, Dutzman said.

The project will begin early next year and take about 30 to 33 months to complete, Mara said. The facility is expected to be fi nished at the end of the second quarter of 2012.

About a dozen employees work at the Ontelaunee site now, and a few more will be hired after the project is completed. About 125 workers will be hired during the construction phase, Mara said.

Dutzman said the approval process for the project took about two years and that UGI LNG got all of the necessary approvals from the township, state and federal authorities.

Liquefied natural gas is natural gas that is cooled until it condenses into a clear liquid. It is not flammable or explosive, according to the company's literature.

"We went through a fairly extensive process," Dutzman said. "We have an excellent record; we never had an incident."

Contact Karen L. Miller: 610-371-5049 or klmiller@readingeagle.com.

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