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Telephone: 609-561-9000
Investor Relations Contact: Stephen Clark x4260
Media Relations Contact: Joanne Brigandi x424
October 24 , 2005
Edward J. Graham
Chairman President & CEO
South Jersey Industries
LNG Facility Would Help Region Manage Growing Energy Challenges
FOLSOM, N.J. – Our goal is to provide natural gas to our customers when and where they need it at a competitive price. We have many talented people who work tirelessly to accomplish this mission each day. But we face a challenge. Our country’s demand for natural gas has increased dramatically over the past 20 years. Energy companies continue to spend billions of dollars to increase production, but that still doesn’t diminish the fact that we have to find new sources of natural gas supply.
The natural gas we use to heat our homes and run our businesses comes to us primarily via pipelines from the Gulf of Mexico. We’ve seen in recent weeks how that supply can be vulnerable in the face of a natural disaster, as was the case during hurricanes Katrina and Rita. The production of natural gas in the Gulf came to a halt. This interruption means much of the gas that should have been produced and stored for winter season withdrawal is now being used to accommodate current needs. Clearly the implications of that interruption have yet to be fully analyzed, but we can safely assume it will have an adverse effect on prices heading into a peak season.
While conservation measures can help reduce energy bills in the short term, in the longer term we need other options for bringing more natural gas into our region. One option is liquefied natural gas, or LNG, which is natural gas that has been chilled and turned into a liquid so it can be stored or transported on ships. LNG is a mainstream form of energy around the globe. For example, almost all of the natural gas used in Japan – one of the world’s most sophisticated economies – arrives there in a condensed liquefied form. During the last 40 years, LNG ships have covered 60 million miles with no major incidents.
LNG represents a small but growing part of the United States natural gas supply – and one of the best mid-term options for bringing prices down for the 66 million families, schools, businesses, manufacturers and electric power plants that rely on clean, efficient natural gas.
South Jersey Gas already stores and uses small volumes of LNG to help meet peak demand during winter months. Looking at the bigger picture, BP has proposed building a terminal and storage facility in Logan Township to receive LNG via ship. After processing, the gas from the facility would be delivered to area pipelines where South Jersey Gas would deliver it to our customers. We believe that with a supply of LNG here in our own state supply issues would be resolved and prices would become more stable for consumers.
We are proud to support this project. It will bring a reliable new supply of natural gas to our doorstep and, in conjunction with local conservation efforts, will help us all better manage our growing energy challenges.
Edward J. Graham
Chairman President & CEO
South Jersey Industries
South Jersey Industries (NYSE:SJI) is an energy services holding company for South Jersey Gas, South Jersey Energy, South Jersey Resources Group, South Jersey Energy Service Plus and Marina Energy. Visit http://www.sjindustries.com for more information about SJI and its subsidiaries.
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