Business Description
Equitable Resources, Inc. is an integrated energy company, with an emphasis
on Appalachian area natural gas activities, including production, gathering
and processing, and distribution, transmission, storage and marketing. The Company
and its subsidiaries offer energy (natural gas, and a limited amount of natural
gas liquids and crude oil) products and services to wholesale and retail customers.
Production
Equitable production business develops, produces and sells natural gas and,
to a limited extent, crude oil and natural gas liquids, in the Appalachian region
of the United States. Its gathering business consists of the gathering of gas
produced by the Company and third parties and the processing of natural gas
liquids.
Equitable Supply’s production business, operating through Equitable Production
Company and several other affiliates (collectively referred to as “Equitable
Production”), is one of the largest owners of proved natural gas reserves
in the Appalachian Basin.
Gathering
Equitable Gathering operating through several subsidiaries of the Company derives
its revenues from charges to customers for use of its gathering system in the
Appalachian Basin. As of December 31, 2007, the system included approximately
7,500 miles of gathering lines located throughout West Virginia, eastern Kentucky
and southwestern Virginia. Over 90% of the gathering system volumes are transported
to interconnects with three major interstate pipelines: Columbia Gas Transmission,
East Tennessee Natural Gas Company and Dominion Transmission. The gathering
system also maintains interconnects with Equitrans, L.P. (Equitrans), the Company’s
interstate pipeline affiliate. Maintaining these interconnects provides the
Company with access to geographically diverse markets.
Distribution Operations
Equitable Utilities’ distribution operations are carried out by Equitable
Gas Company (Equitable Gas), a division of the Company. The service territory
for the distribution operations includes southwestern Pennsylvania, municipalities
in northern West Virginia and field line sales, also referred to as farm tap
service, in eastern Kentucky and West Virginia. These areas have a rather static
population and economy. The distribution operations provide natural gas services
to approximately 275,000 customers, consisting of 256,400 residential customers
and 18,600 commercial and industrial customers. Equitable Gas purchases gas
through contracts with various sources including major and independent producers
in the Gulf Coast, local producers in the Appalachian area and gas marketers
(including an affiliate). These contracts contain various pricing mechanisms,
ranging from fixed prices to several different index-related prices.
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