Virginia Natural Gas, a subsidiary of AGL Resources , today broke ground on its Hampton Roads Crossing (HRX) natural gas pipeline, which will connect two previously non-contiguous northern and southern pipeline systems by crossing the Hampton Roads harbor.

"The HRX pipeline is a key element in the development of Virginia's energy infrastructure which is called for in Virginia's Energy Plan," said John W. Somerhalder II, chairman, president and CEO of AGL Resources. "In addition to increased gas supply, this connection provides for an increase in reliability for residential and industrial customers and area military facilities."

The HRX natural gas pipeline will transport up to 100,000 dekatherms per day of additional capacity into the Virginia Natural Gas distribution system. This will increase reliability of gas service and provide for an ample supply of natural gas to the rapidly growing Hampton Roads region. The total cost of the project, based on current estimates, will be approximately $123 million.

Virginia Natural Gas made unprecedented efforts to develop the HRX project in a responsible manner that addresses the need for a reliable energy supply and minimizes potential impacts to the environment and communities. Virginia Natural Gas will utilize an environmentally sensitive construction approach at a greater construction cost for the marine crossing.

The company is consulting with biologists, marine contractors and environmental engineers and others with significant experience in the development of marine pipelines to develop the most suitable and constructible pipeline for the harbor crossing. Directional drilling will be utilized for 75 percent of the length of the portion of the pipeline crossing the Hampton Roads harbor. Trenching will be used for 25 percent on the northern side of the pipeline. The company is routing 90 percent of the onshore portion of the pipeline in existing municipal or utility right-of-way to minimize impacts to green spaces, residential and commercial properties.

"This is an exciting day for Virginia Natural Gas and for the region," said Jodi Gidley, president, Virginia Natural Gas. "This project is expected to add much-needed reliability, enhance the region's growing energy infrastructure and provide local economic benefits, including approximately 100 jobs during construction."

The HRX project completion date is slated for late 2009. Project details can be found on the company's Web site at www.virginianaturalgas.com.

About Virginia Natural Gas

Virginia Natural Gas, a wholly owned subsidiary of AGL Resources , provides retail natural gas sales and distribution services to 269,000 customers in southeast Virginia. For more information, visit www.virginianaturalgas.com.

About AGL Resources

AGL Resources , an Atlanta-based energy services company, serves more than 2.2 million customers in six states. The company also owns Houston-based Sequent Energy Management, an asset manager serving natural gas wholesale customers throughout the nation. As a 70 percent owner in the SouthStar partnership, AGL Resources markets natural gas to consumers in Georgia under the Georgia Natural Gas brand. The company also owns and operates Jefferson Island Storage & Hub, a high-deliverability natural gas storage facility near the Henry Hub in Louisiana. For more information, visit www.aglresources.com.

FCMN Contact: jholt@aglresources.com

SOURCE: Virginia Natural Gas