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Washington Gas Plans to Build LNG Storage Facility in DC Region

Washington Gas, the natural gas distribution subsidiary of WGL Holdings Inc., has announced plans to build its first liquefied natural gas (LNG) storage facility on company-owned property in Chillum, MD, outside of Washington, DC.

The utility hopes to have the planned 1 Bcf LNG storage project completed and in service by the winter of 2008, at which time it projects it could experience a supply shortfall due to the growing demand for natural gas in its service territory, which includes Washington, Virginia and Maryland, said Washington Gas spokesman Tim Sargeant. The company maintains existing propane storage plants in Rockville, MD, and in Springfield, VA.

The planned storage facility would hold five to 10 days of LNG-sourced gas supply to serve Maryland customers depending on the severity of the weather, he told NGI. Sargeant said Washington Gas selected Chillum as the site for the new storage plant because eight Washington Gas distribution lines run through that area.

The utility said it would cost $80 million to build and $30 million to operate the facility over 20 years. "Possible alternatives could cost approximately $540 million over the same time period," with the cost being recovered in customer rates, said Adrian P. Chapman, vice president of operations, regulatory affairs and energy acquisition for Washington Gas.

The project will require the regulatory approval of the Maryland Public Service Commission, according to Sargeant. He said the company has yet to file an application with the agency.

Washington Gas supplies natural gas to more than one million residential, commercial and industrial customers throughout the metropolitan Washington, DC region and surrounding areas.

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