Piping cash out of provincial pockets

The Vancouver Island Gas Pipeline Project (VIGAS) received funding in 1988, but the project ran into political delays, environmental impact studies and design changes. By the time it was finished in 1991 VIGAS was $110 million over its capital budget of $250 million. Furthermore, it was facing losses of as much as $449 million, a risk that the Province was unwilling to take on. Under a new agreement with Westcoast Energy Inc., the province will pay $120 million cash to Pacific Coast Energy Co., and cede future gas royalties to Centra Gas Inc. It will also defer repayment of $75 million in interest-free loans. The province will then phase out its subsidy for VIGAS customers over the next six years, at which point the pipeline will become an entirely commercial venture with prices based on the market rate