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Chesapeake Utilities to exit gas marketing business with asset sale

Chesapeake Utilities Corp. is selling the majority of the assets of its natural gas marketing subsidiary Peninsula Energy Services Co. Inc., marking the company's exit from the gas marketing business.

Chesapeake has entered into three separate transactions to divest Peninsula Energy Services', or PESCO's, assets and contracts, according to an Oct. 9 news release.

The subsidiary's Florida retail operations would be sold to gas provider Gas South LLC, while its non-Florida retail operations and contracts would be sold to energy marketing company United Energy Trading LLC. PESCO's Mid-Atlantic wholesale contracts and Chesapeake Utilities' Delaware and Maryland divisions and Sandpiper Energy Asset Management agreements would be divested to New Jersey Resources Corp. unit NJR Energy Services Co.

The sale resulted from a strategic review of the PESCO business unit, after which Chesapeake Utilities determined it should focus on its core energy delivery businesses, Chesapeake Utilities President and CEO Jeff Householder said. "The level of investment in infrastructure required to achieve the scale needed for future growth meant that PESCO would not achieve the target returns we expect."

PESCO Assistant Vice President Bill Hancock also said the company is expecting to sell its remaining small book of business, its Producer Services portfolio, by the end of the year.

Chesapeake Utilities provides natural gas and electricity distribution services, among other lines of business.