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

News Release
Significant Growth of Natural Gas Demand Will Require New Supplies, Infrastructure, says Industry Study
Yankee Gas' LNG project supports strategy for diversified resources
MEDIA CONTACT:Sandy St. Pierre
Office:(860) 665-6211
After Hours:(860) 279-1173
BERLIN, Conn., December 11, 2002 (NYSE: NU) -- Demand for natural gas to fuel homes, businesses and industries is expected to grow significantly over the next 20 years and while gas supplies are abundant today, efforts to develop fresh resources to meet future market demand must begin now. That’s the conclusion of an industry study of long-term gas supplies, released today by the American Gas Association (AGA).

“Natural gas is an important part of the equation for local economic development. Many businesses and industries demand energy options if they are expanding or relocating to Connecticut and they want natural gas to be one of those options,” said Dennis E. Welch, president and chief operating officer of Yankee Gas Services Company, Connecticut’s largest natural gas distribution company. “It’s a major factor in our decision to expand our own distribution system, so we can deliver fuel choice and help local communities grow.” Yankee Gas is part of the Northeast Utilities system and serves 191,000 customers in 71 communities in Connecticut.

The AGA study, called From the Ground Up: America’s Natural Gas Supply Challenge, concludes that developing new gas resources is critical to long-term economic growth, environmental protection and stable energy prices. The AGA also recommends expanded use of nontraditional resources, such as liquefied natural gas (LNG).

“As a local distribution company, we have a responsibility to ensure a reliable gas supply at reasonable prices for our customers. While current supplies are abundant, we must plan for the future,” said Welch. “One way we are doing that
involves our plan to build an LNG plant in Waterbury, giving us greater flexibility and security of our gas supply. LNG is safe, reliable and economic. But building plants like this, expanding pipeline infrastructure and developing new supply resources won’t happen overnight.” The AGA study calls for public policy changes to allow for expansion of production, pipeline and local delivery infrastructure needed to deliver those resources to market.

Yankee’s plan to build an LNG storage and production facility has received approval from three local boards and commissions in Waterbury and is currently being reviewed by the Connecticut Department of Public Utility Control (DPUC). The facility, which will take three years to build, will provide Yankee with additional reliability and flexibility in serving its customers’ needs. LNG currently accounts for about 15 percent of New England’s gas supply; it increases to 25 percent during peak demand periods.

“We hear from customers every day about their preference for natural gas. It’s incumbent upon us to do everything we can to meet those demands, now and in the future,” added Welch.

The full AGA study can be found online at www.aga.org.

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 191,000 customers in 71 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.yankeefinancialservices.com

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