Charlotte-based Duke Energy has bought a 7.5 percent stake in the proposed $3 billion, 500-mile Sabal Trail natural gas pipeline that will run through Alabama, Georgia and Florida in order to supply the growing demand for natural gas in those states.
Duke, the largest electric utility in the U.S., said Tuesday its commercial power business unit will invest about $225 million in the underground pipeline over the next seven years, and about 90 percent of the investment will be over the next three years.
The pipeline will have the capacity to deliver about 1.1 billion cubic feet of natural gas a day. It’ll supply natural gas-fired power plants, natural gas distribution companies, manufacturing plants and other industrial users in the Southeast.
Compared with coal and oil plants, natural gas plants release significantly smaller amounts of greenhouse gases and other emissions, Duke said.
Construction on the pipeline is slated to begin in 2016, and service will start in 2017. The project requires federal and other regulatory approvals.
“Duke Energy’s investment in the pipeline further expands the company’s commitment to build critical natural gas pipeline infrastructure in the Southeast U.S., where natural gas has become an important fuel that provides significant environmental benefits,” Phil Grigsby, Duke Energy’s vice president of commercial transmission, said in a statement.
The pipeline’s other owners include Spectra Energy, which owns 59.5 percent, and NextEra Energy, which owns 33 percent.
Last September, Duke Energy bought a 40 percent share in the proposed 550-mile, $5 billion Atlantic Coast Pipeline, which will run from West Virginia through Virginia to North Carolina. Piedmont Natural Gas will own 10 percent of the line.
The two companies said the pipeline could smooth out natural gas price spikes.