BANGOR – City officials are close to signing a three-year contract with a local company to run natural gas service lines to City Hall and four other municipal buildings, a switch that could save the city $100,000 annually.

Finance Director Debbie Cyr said the conversion is part of an 18-month effort to overhaul energy consumption citywide.

“We have a number of changes planned that arose out of a lengthy energy audit. In concert with this, our school department is going through the same process,” she said Monday.

The three-year contract with Bangor Gas, the only natural gas provider in eastern Maine, was discussed by the finance committee Monday and will be voted on by city councilors later this month, Cyr said.

Five municipal buildings – City Hall, the central fire station, the Public Works building, the recycling station and the bus wash – were identified for conversion to natural gas. The cumulative conversion cost is about $200,000, the finance director said, but if prices stay the same, the payoff could take less than two years.

Natural gas is running at about $1.77 per therm, which is equivalent to 100,000 British thermal units, or BTUs, compared with $4.50 per gallon of No. 2 heating oil, which produces 138,000 BTUs. In simple terms, natural gas costs about half the current rate for oil.

“Historically, natural gas has been increasing, too, but it’s always trailed oil,” Cyr said.

Once the municipal facilities are converted, the city will begin exploring natural gas as an option for six of Bangor’s 10 schools, the Bangor International Airport and the city’s wastewater treatment facility. The savings if those facilities are converted to natural gas could be even greater.

Cyr said any savings will likely be used to offset other fuel costs, such as Bangor’s diesel demands.

Bangor Gas, which has pipelines in Bangor, Brewer, Veazie, Orono and Old Town, has seen a steady increase of customers, both residential and commercial, as oil prices have drastically risen.

Jon Kunz, the company’s sales manager, said recently that salespeople are having a hard time keeping up with the increasing demand.

Officials aren’t exploring natural gas for just city-owned property, either.

Dan Tremble, treasurer for Penobscot County, said commissioners are looking at converting the existing county courthouse and jail facility to natural gas.

“We use 85,000 gallons of oil there and it would cost about $15,000 [in infrastructure] to convert to natural gas,” he said. “That should save us up to $100,000 every year.”

Several Bangor nonprofits also have recently expressed interest in natural gas, including the Maine Discovery Museum, Penobscot Theatre and the Challenger Learning Center of Maine.

The utility is still relatively new in eastern Maine. Natural gas was not available before 1998, when the Maritimes & Northeast Pipeline was constructed to bring gas through Bangor from Sable Island off Nova Scotia.

Bangor Gas officials also have said they are committed to expanding their available service area if demand is great enough.