Sept 2 (Reuters) - Enbridge ( ENB ) said on Tuesday it

has reached a final investment decision to go ahead with

Algonquin gas transmission (AGT) pipeline expansion to

capitalize on the growing natural gas demand in the United

States.

Even as oil production starts to plateau, gas production in

the U.S. is predicted to increase to meet increased electricity

use and a surge in liquefied natural gas exports.

U.S. pipeline firms, including Kinder Morgan ( KMI ),

Williams and Energy Transfer ( ET ), are spending

billions to build hundreds of miles of new pipelines, including

in the Northeast, to meet the increasing demand.

Once completed, the expanded pipeline will deliver about 75

million cubic feet per day of incremental natural gas under

long-term contracts in the U.S. Northeast. Natural gas is a key

component of the energy mix in the region.

Enbridge ( ENB ) expects to invest $300 million in system upgrades

and fully complete AGT enhancement in 2029.

Companies typically reach an FID on projects once they have

secured enough supply deals to obtain the necessary financing

for construction.

Last month, Enbridge ( ENB ), through its Matterhorn joint venture,

reached FID for the construction of the Eiger Express Pipeline .