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Yankee Gas Services Company
P.O. Box 270
Hartford, CT 06141-0270
(800) 989-0900

News Release
Yankee Gas announces Waterbury is preferred site for LNG plant
Economic boost for city; reliable, diverse gas supply for customers
MEDIA CONTACT:Sandy St. Pierre
Office:(203) 639-4423
After Hours:(860) 279-1173
MERIDEN, Conn., November 7, 2001 (NYSE: NU) – Yankee Gas Services Company, part of the Northeast Utilities (NU) system, announced today that its Waterbury operations center is the preferred site for construction of a proposed liquefied natural gas (LNG) storage and production facility. The proposed LNG project was first announced earlier this year in the company’s rate application to the Connecticut Department of Public Utility Control (DPUC). Yankee is proposing to build the state-of-the-art plant to ensure a secure and reliable supply of natural gas to meet the growing energy demands of current and future customers throughout Connecticut. The proposed project, which will potentially provide a major economic boost to the city of Waterbury, was presented to Acting Mayor Sam Caligiuri and Mayor-Elect Michael Jarjura.

“This project is vital because it provides another in-state gas supply that reduces our dependence on the interstate pipelines, especially during peak winter heating demand periods,” said Dennis E. Welch, president and chief operating officer of Yankee Gas. “This new supply source is also strategically important to meeting the state’s increasing energy demands, now and in the future. It allows us to buy gas when prices are lower in the summer, for example, and deliver it to our customers in the winter, when both demand and prices are higher. That makes this project so much more important, because it gives us greater control and diversity of our gas supply.

“Waterbury is our preferred site for several reasons. Operationally, it’s the best site because of our proximity to the interstate pipelines. It allows us to deliver the gas from this proposed plant and displace interstate pipeline gas for delivery to other Yankee distribution systems elsewhere in the state, thanks to the interconnection of all three interstate pipelines with Yankee’s Waterbury system. We also have a vested interest in the city’s renewal, as Waterbury represents our largest customer base,” added Welch.

A commitment to Waterbury
Yankee’s selection of Waterbury as its preferred site reflects the company’s longstanding commitment to the community. “We’ve been here for decades serving many of the city’s businesses and residents and many of our employees live here; this community is important to us. We are looking forward to continuing to work with the DPUC, the city of Waterbury and its Oversight Board to ensure this is a win-win for the city of Waterbury and for Yankee’s customers,” said Welch. “Our growth is good for the city and good for our customers, many of whom are here; this plant will allow us to better serve all of our customers while supporting the city’s need to grow its tax base.”
Yankee Gas shares the city’s commitment to hold a public forum to help educate the community about this proposed project. Timing for this forum will be determined once project details are finalized.
Yankee Gas currently operates a regional work center on Eagle Street in Waterbury that includes its weld shop and warehouse. The property, which abuts the Naugatuck River and Railroad Hill Road, also houses a propane peakshaving facility. Yankee once operated four smaller LNG facilities in the state, one of which was at its Waterbury work center. The facility was installed in 1974 and retired in 1991.

Safety a top priority
LNG has an excellent safety record in Connecticut and in the U.S. In fact, it was NASA’s race to the moon in the 1960s that led to the cryogenic technology that is the standard in designing today’s LNG plants. LNG is not new to Connecticut; there currently are two LNG plants operating in the state and Yankee once operated four smaller LNG plants – in Waterbury, Danbury, Torrington and Stamford – from the early 1970s until their retirement in 1991. The proposed new state-of-the-art facility would consist of a double wall concrete tank (an inner tank and an outer tank). LNG can either be delivered by truck or it can be produced from gas taken from the interstate pipeline system and it is stored as safely as any other liquid fuel. Trucking of LNG also has an excellent safety record. Like the LNG plant, the tankers that deliver LNG are also made with a double-walled feature.

The plant Yankee is proposing to build is a state-of-the-art facility that meets all federal and state code requirements and includes several safety and security features including electronic surveillance and extensive leak detection and fire protection technologies. Once all approvals and permits are secured, construction would take approximately three years to complete.

Yankee Energy System, Inc., (YES) which is part of the Northeast Utilities system, includes Yankee Gas Services Company, the largest natural gas distribution company in Connecticut serving approximately 187,000 customers in 69 cities and towns throughout the state. Yankee Energy also includes Yankee Energy Financial Services Company, which provides a full range of residential and commercial energy equipment financing options. Further information about YES can be obtained from its Web sites: www.yankeeenergy.com, www.yankeegas.com and www.yankeefinacialservices.com

LNG Fact Sheet

What is LNG?

Liquefied natural gas, or LNG, is natural gas that is cooled to a temperature of approximately minus 260 Fahrenheit and condensed to a liquid form at atmospheric pressure. LNG weighs less than one-half that of water and is odorless, colorless, non-corrosive and non-toxic.

How is LNG stored?

LNG is stored in special tanks that maintain both constant pressure and temperature. LNG tanks are always built with double-wall construction with extremely efficient insulation between the walls. Yankee is proposing to build a double-walled concrete tank (inner tank and outer tank). Storage pressures in the tanks are very low – typically between 1.5 and 3 psig (pounds per square inch). LNG must be kept cold (at least below minus 117 Fahrenheit) to remain a liquid, regardless of pressure.

How is LNG delivered or made?

LNG can be delivered by truck or it can be produced by taking natural gas off the interstate pipeline, removing its impurities and processing it into LNG.

Is it safe to transport LNG by truck?

Yes; LNG has an excellent safety record. Like the double-walled storage tanks of an LNG facility, LNG trucks also have reinforced double tanks. It is as safe to transport LNG as it is to transport any other liquid fuel. In the event of an accidental spill, LNG is environmentally safe because it evaporates, unlike other fuels – such as gasoline – that soak into the soil.

How is LNG used by a company like Yankee Gas?

LNG is most often used for peakshaving – when pipeline capacity cannot meet the peak demand caused by cold weather or other temporary factors. Typically, LNG is purchased during off-peak periods – spring, summer and fall – when prices and demand are lower, and stored for use during peak demand periods. This gives greater control and diversity of gas supply and helps keep gas costs down for all customers.

How many LNG plants are there in the U.S.? In Connecticut?

There are 54 LNG peakshaving plants located in the lower 48 states; there are two in Connecticut. Yankee Gas operated four smaller LNG plants – in Waterbury, Danbury, Torrington and Stamford – from the early 1970s until their retirement in 1991.

Why did Yankee Gas retire its smaller LNG plants?

Yankee retired, or took out of service, its LNG plants in 1991 because of operational concerns. The plants were too small to economically impact supply or costs for customers, often requiring expensive refills during the winter heating season when prices were higher. In addition, because their supply would be depleted, the tanks would warm up in between refills and would have to be cooled again to store the LNG. This is known as cycling. This continued cycling between cold and warm temperatures of the tanks raised concerns of metal fatigue of the tanks and the company made a decision to retire the plants.

Comparatively, the size of Yankee’s proposed new LNG plant greatly improves the economics of the project to the benefit of all customers and there will always be an adequate volume of liquid stored in the tank to maintain its cold temperature.

What’s the design criteria for these facilities?

LNG plants are built to two specific codes: The National Fire Protection Association (NFPA) 59A and the U.S. DOT Code of Federal Register, Section 49, Part 193. Both of these codes relate to the design, construction and operation of LNG facilities.

What is the life expectancy of Yankee’s proposed LNG facility?

The life expectancy of Yankee’s proposed LNG facility is in excess of 40 years.

How long will it take to fill the tank when it’s empty?

After initial operations and testing, the plant would be filled either by the liquefier or by truck-loads of LNG. The liquefier is designed to fill the tank in 200 calendar days. If trucking is desired, it would take between 2,000 and 2,300 truck loads to fill the tank. Based on a 24/7 schedule, it would take approximately 9.5 weeks to fill the tank in this manner. Once the tank is full and goes through its first peak demand cycle of operation, it will take substantially less time to refill because the tank will rarely be emptied, except for maintenance issues.

How susceptible is the tank to corrosion?

The inner tank walls are built with pre-stressed concrete and the inner tank floor is built of welded 9% nickel steel. The tank is inherently safe because without oxygen and with extreme cold temperatures, corrosion will not occur.

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