Terasen Gas (Vancouver Island) Inc. filed an application Tuesday with the British Columbia Utilities Commission to construct and operate a 1.5 Bcf natural gas storage facility on Vancouver Island. The project, which has been in development since 2004, is expected to cost C$175-200 million (US$165-188 million). If approved the facility could be in service by late 2011.

The proposed project site, known as Mt. Hayes, is north of Ladysmith, BC, on 142 hectares to be purchased by Terasen Gas (Vancouver Island) Inc.

"This project plays an integral role in the regional distribution of natural gas," said Doug Stout, Terasen Gas vice president, marketing and business development. "As a regional resource, it will ensure our customers have access to the natural gas they need for their homes and businesses." He added that the facility also would allow the utility to become more self-sufficient and reduce its reliance on other storage facilities located in the Pacific Northwest.

According to the Fortis Inc. subsidiary, the proposed storage facility would allow it to meet current and future gas demand, both on Vancouver Island and across the Lower Mainland by storing liquefied natural gas. It also would allow more efficient use of Terasen Gas's existing pipeline systems.

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