GSX Pipeline Project Cancelled

BC Hydro news release
Williams news release

Proposed GSX Pipeline Project Cancelled

December 20, 2004

Other Options More Cost Effective at Ensuring Reliable Supply for Vancouver Island

PROVINCE-WIDE – BC Hydro and Williams have today announced the cancellation of the Georgia Strait Crossing (GSX) pipeline project. The $340 million natural gas pipeline had been proposed by the two companies in 2000 as the best way to meet the demand for gas transportation along its United States route and to natural-gas fired electricity generation facilities on Vancouver Island.

"A large capacity pipeline like GSX is no longer a competitive supply option because the large gas supply requirements it was designed to meet have not materialised," said Dawn Farrell, Executive Vice President, Generation. "There are other lower cost alternatives to meet these gas requirements which, together with the fuel switching capability now available at the Island Cogeneration Plant (ICP) in Campbell River, means there can be enough reliable natural gas supply on the Island to meet required demands without GSX."

"Cancelling the project now will stop all further expenditures on the project and also eliminate it as an issue in ongoing regulatory processes relating to Terasen and the Duke Point Power Project."

In April 1998, BC Hydro sought private sector proposals to help it meet the natural gas requirements for ICP, a proposed natural gas fired (then to be situated in Port Alberni) and a possible third facility somewhere else on Vancouver Island. BC Gas (now Terasen), Centra/ West Energy and Williams Gas Pipelines submitted proposals. Williams' proposal was deemed the most cost effective at that time.

"Our goal now remains the same as it was when we starting looking at GSX – to ensure the lowest cost, most reliable electricity for our customers on Vancouver Island," added Farrell. "There are a range of lower cost alternatives to GSX, including a number with Terasen. These will ensure that on-Island electricity generating facilities – including the proposed Duke Power Project in Nanaimo – have enough natural gas supply to maintain their firm reliable supply of electricity for our customers even during the most critical winter months."

Stephen Bruyneel
BC Hydro
Phone: (604) 623-4344

Beverly Chipman
Phone: (801) 584-7048

BC Hydro news release

Williams Announces End to Proposed Georgia Strait Project

December 20, 2004

TULSA, Okla. — A unit of Williams (NYSE:WMB) announced today an agreement to discontinue development of the Georgia Strait Crossing pipeline project.
Williams Gas Pipeline and British Columbia Hydro and Power Authority – co-sponsors of the project – have mutually agreed to end plans to construct a $209 million natural gas pipeline across the Strait of Georgia to serve electric generation facilities on Vancouver Island, B.C.

Project development costs, estimated at approximately $34 million, were funded by BC Hydro. Under the terms of the agreement with Williams, BC Hydro assumes full responsibility for all project costs.

The decision on whether the project would proceed has been on hold since September 2003 pending a regulatory review of energy needs on Vancouver Island.

As a result of the Canadian regulatory process, BC Hydro has decided to pursue other alternatives to meet short-term energy needs and will move forward with plans to replace aging electric transmission cables.

“In light of BC Hydro’s decision to pursue other alternatives, we agree that it is time to terminate the project,” said Allison Bridges, vice president of commercial operations for Williams Northwest Pipeline. “When it was originally proposed, this was a viable alternative for supplying Vancouver Island’s long term energy needs, and we believe it also held long term, cost-effective options for future industrial development in western Washington.”

The 84-mile pipeline project received a FERC certificate in September 2002 and similar approval from the National Energy Board of Canada in December 2003.

About Williams (NYSE:WMB)
Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. The company also manages a wholesale power business. Williams’ operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, Southern California and Eastern Seaboard. More information is available at

Contact Information:
Beverly Chipman Williams Media Relations 801-584-7048
Courtney Baugher Williams Investor Relations 918-573-5768

Williams news release

Posted by Arthur Caldicott on 20 Dec 2004