Berlin, CT-based Yankee Gas plans to break ground in spring 2004 on what it bills as the largest project ever undertaken by the natural gas utility — an estimated $53 million liquefied natural gas (LNG) storage facility.

Connecticut regulators last month gave Yankee Gas, which is part of the Northeast Utilities system, the green light to build a 1.2 Bcf storage facility in Waterbury, CT. The Connecticut Department of Public Utility Control, however, said Yankee’s request to add liquefaction capability was not justified at the time, but it signaled that it would re-examine the issue possibly next year.

“The liquefaction piece [of the project] is still up in the air,” said Yankee spokeswoman Sandy St. Pierre, adding that the utility must prove to Connecticut regulators that it would be cost effective so Yankee can recover the costs through its rates.

The company plans to submit a compliance filing to regulators next June to further its case for the construction of liquefaction facilities, she told NGI. The Waterbury facility would receive LNG via trucks and would take gas off the interstate pipeline system and liquify it for storage. The project is expected to be in service by the start of the 2007-2008 winter heating season, St. Pierre said.

Yankee Gas estimated that if it had access to LNG storage during a 20-day period last February when gas prices spiked, it could have saved its customers approximately $1.5 million in gas costs, she noted.

Yankee Gas supplies gas to about 191,000 customers in Connecticut.

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