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June 21, 2012 | last updated June 22, 2012 10:51 am

Natural gas co. picked to supply Augusta state buildings

The state government has chosen Maine Natural Gas, a subsidiary of Iberdrola USA, to build a natural gas pipeline in Augusta to serve its facilities. The Bureau of General Services chose the MNG proposal in a competitive process it initiated to save on state energy costs, according to a press release.

Brunswick-based MNG has filed for permits and plans to begin construction on the east side of Augusta this summer. The second phase of the project, slated for 2013, will extend along Western Avenue and Leighton Road, and continue into the north Augusta area. MNG also plans to build out its distribution network to serve residential, commercial and industrial customers in Augusta as soon as possible, and is also planning to expand service to other areas in the Kennebec Valley. The project would be funded by Iberdrola, also the parent company of Central Maine Power Co., and would not include public financing or tax guarantees.

MNG currently provides natural gas service in the Bowdoin, Brunswick, Gorham and Windham areas. It first announced plans for the Augusta pipeline in January. The project will compete with another natural gas pipeline project by Kennebec Valley Gas Co., which was recently acquired by Summit Natural Gas of Maine Inc., a subsidiary of Colorado-based Summit Utilities.

The award decision is subject to approval by the State Purchases Review Committee. Iberdrola USA CEO Bob Kump said the state could save up to $18 million on energy costs over the next 10 years.

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