Atlanta Gas Light Co. (AGLC), one of the South’s largest natural gas distributors, is expanding its liquefied natural gas (LNG) peak shaving facility in the exurbs of Atlanta as part of a long-term response to growing energy demand.

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The Southern Co. affiliate has started work on a $250 million expansion of its Cherokee LNG facility in Ball Ground, GA to add a second storage tank. The project could double its storage capacity to hold 4.1 Bcf. Completion is expected in three years.

AGLC had said the LNG expansion is a more reliable approach to growing capacity than solely using pipeline projects because of increased costs and regulatory hurdles. It pointed to examples like the Atlantic Coast Pipeline, Mountain Valley Pipeline and PennEast Pipeline projects, which AGLC said...