Piedmont Natural Gas Looks to $605 Million in Capex for 2015 after Companywide Growth in 2014

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Researched by Industrial Info Resources (Sugar Land, Texas)--Natural gas services provider Piedmont Natural Gas Company (NYSE:PNY) (Charlotte, North Carolina), which primarily serves North Carolina, South Carolina and Tennessee, saw strong companywide gains in 2014 as low gas prices and colder-than-expected weather led to a significant growth in the company's customer base. Net income was reported to be $143.8 million, a 6.98% increase from 2013.

As part of its growing Oil & Gas Pipelines Project Database, Industrial Info is tracking the development of Piedmont's $20 million pipeline in Anderson County, South Carolina. The 1.5-mile, 20-inch-diameter pipe will transport up to 75 million standard cubic feet per day of natural gas from the Anderson Compressor Station to Duke Energy's (NYSE:DUK) (Charlotte, North Carolina) W.S. Lee generation facility. Industrial Info also is tracking progress at six Piedmont-owned facilities in North Carolina: the Battleboro, Clayton, Waynesboro, Wadesboro, Concord and Lumberton stations.

Total operating revenues stood at $1.47 billion, a 15% increase from 2013. Piedmont's 1.6% growth in its customer base, along with weather that was slightly colder than the already-chilly 2013, led to a 6% growth in system throughput to 410.7 million dekatherms. Other factors included beneficial changes in regulatory rates; a jump in transportation services for the power-generation market; stronger contributions from Illinois-based SouthStar Energy Services, which Piedmont co-owns with AGL Resources Incorporated (NYSE:GAS) (Atlanta, Georgia); and stronger sales on the secondary market. Stronger volumes were most pronounced in South Carolina and Tennessee.

Piedmont also announced a 10% ownership in the Atlantic Coast Pipeline project. The planned, 550-mile pipeline would transport up to 1.5 billion cubic feet of gas per day from the Marcellus and Utica shale formations to North Carolina and Virginia. Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia) owns 45% of the project, while Duke Energy owns 40% and AGL Resources owns 5%. For more information, see December 1, 2014, article - Proposed Pipeline Would Bring Gas from Marcellus, Utica Shales to North Carolina, Virginia.

Capital expenditures for utilities and contributions to joint ventures totaled $515 million in 2014, slightly less than the previously estimated $540 million. Capital expenditures for utilities and contributions to joint ventures totaled $672 million in 2013.

Piedmont executives expect to see another 1.6% growth in 2015's customer base. Higher margins are expected in North Carolina and Tennessee following rate case settlements. Executives also expect $13 million in income for allowance for funds used during construction (AFUDC), along with higher joint venture contributions, for the Atlantic Coast and Constitution pipeline projects. However, wholesale secondary-market margins are expected to be lower due to normal weather.

"We continue to see pretty strong progress, mostly in the residential new construction market, and we're seeing that across [North Carolina, South Carolina and Tennessee]," said Frank Yoho, the senior vice president and chief commercial officer of Piedmont, in a conference call. "Commercial [construction] is firming up, continues to do well. And in the conversion market, you mostly see [conversions from] propane and fuel oil."

Capital expenditures are estimated to total $605 million this year.

"Some of our future capital expenditures will be to continue to serve new natural gas power generation in our region," said Thomas E. Skains, the chairman, president and chief executive officer of Piedmont, in a conference call. "In June, we announced a new natural gas-delivery project for Duke Energy to serve their planned W.S. Lee facility in Anderson County, South Carolina."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.