Terasen Gas breaks ground on $200-million Vancouver Island Project

May 9, 2008

SURREY, B.C. – Terasen Inc. President and CEO Randy Jespersen was joined today by government officials, community attendees, local First Nations and major contractors to commemorate the start of construction for Terasen Gas (Vancouver Island) Inc.’s recently approved Mt. Hayes Natural Gas Storage Facility.The facility will be supplied by the company’s existing pipeline systems.

“This project represents an important part of British Columbia’s energy infrastructure that will help Terasen Gas provide a secure, reliable supply of natural gas for Vancouver Island and mainland customers well into the future,” said Randy Jespersen, Terasen Inc. President and CEO.

“It will do this by providing a more reliable, cost-competitive means of storing gas close to the customers we serve while reducing the dependence on off-system, out-of-province storage facilities. This flexibility enhances our ability to meet the needs of customers during planned or unplanned system interruptions or meeting peaking requirements when demand for natural gas is at its highest,” said Jespersen.

Today’s groundbreaking follows a five-year public consultation process with the community. Terasen Gas has been developing this project since 2004 and received final approval from the B.C. Utilities Commission last month. Construction will take place over three years with the facility coming into service by late 2011.

“The Terasen Gas storage facility project is an example of the benefits that can result for both First Nations and the private sector when a relationship of mutual trust and respect is developed,” said Chief Peter Seymour, Chemainus First Nation. “The Chemainus First Nation believes that Terasen Gas has demonstrated a real desire to work cooperatively with us in regards to its development of a significant project on our traditional land. We would encourage other businesses to follow their lead in dealing with First Nations in all parts of British Columbia.”

The facility will also create substantial mid-Island economic and employment benefits, including:

~ local construction expenditures – $50 million
~ local, direct employment – an average of 40 workers per year over the three-year construction project
~ nine full-time operations jobs at the facility
~ opportunities for involvement of First Nations people and businesses in the project

“Throughout the approval process, Terasen Gas worked diligently with the local community to share project details and address social, environmental and safety concerns expressed by residents,” said Mary Marcotte, director Area H, Cowichan Valley Regional District. “The entire local mid-island economy will benefit directly from the construction of the facility.”

The 12-hectare facility site is contained within the 84-hectare project site, known as Mt. Hayes, located approximately six kilometres northwest of Ladysmith. The storage tank itself will hold 1.5 billion cubic feet of liquefied natural gas and will cost approximately $200 million.

Terasen Gas delivers natural gas and propane through three companies that make up the Terasen Gas group: Terasen Gas Inc., Terasen Gas (Vancouver Island) Inc. and Terasen Gas (Whistler) Inc. The companies share common Terasen Inc. ownership and are indirect wholly owned subsidiaries of Fortis Inc. Fortis Inc., the largest investor-owned distribution utility in Canada, serves two million gas and electric customers and has more than $10 billion of assets. Its regulated holdings include Terasen Gas and electric utilities in five Canadian provinces and three Caribbean countries. Fortis Inc. owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns hotels and commercial real estate in Canada. Fortis Inc. shares are listed on the Toronto Stock Exchange and trade under the symbol FTS. Additional information can be accessed at www.fortisinc.com or www.sedar.com.

Media contact:
Carol Greaves, Community Relations Manager
Terasen Gas
Phone: (250) 888-0588
E-mail: carol.greaves@terasengas.com