07/31/2013 08:18 EDT | Updated 09/30/2013 05:12 EDT

B.C. Ghost Town Could Become Major Natural Gas Hub

An entrepreneur is trying to breathe new life into the B.C. ghost town of Kitsault by making it a major hub in the province`s growing liquid natural gas infrastructure.

Krishnan Suthanthiran, an Indo-Canadian businessman who made his fortune selling medical supplies throughout North America, bought Kitsault in 2004 for $5 million in cash.

"I think I saw an article that the town was for sale and I started reading about all the things the town has. And it intrigued me," he said.

The town, which is located north of Prince Rupert on Alice Arm, was constructed nearly overnight in the early 1980s by U.S. mining conglomerate Phelps Dodge.

The company hoped to mine the nearly 109 million tonnes of molybdenum, a metal used in steel production, from the ground around Kitsault.

Phelps Dodge built about 100 detached homes, apartment buildings and all the amenities of a vibrant community: a recreation centre with a curling rink and movie theatre, a fully equipped hospital, a shopping mall and a swimming pool.

About 1,200 mine workers moved to Kitsault with their families.

"It was a great place," says Larry Payjack, a shop owner and one of Kitsault`s original residents.

"It had the store, it was great for kids, fantastic fishing. It was set up as a permanent place for people to be.”

Just 18 months later, however, they had all moved out. In 1983, commodities markets crashed and Phelps Dodge closed the mine, bought back houses from workers and ordered everyone to leave.

Suthanthiran bought the town 21 years later, hoping to make Kitsault a resort destination.

He hired a summer caretaker, Indhu Mathew, who is currently the town's only resident, to take care of the place until his vision could be realized.

In January of this year, however, Suthanthiran formed Kitsault Energy and began pitching the empty town as an ideal location to build a liquid natural gas plant and pipeline terminal to ship B.C.'s vast natural gas resources to markets in Asia.

Suthanthiran says it has cost him about $2 million just to keep the town from crumbling, and liquid natural gas may be the only way to keep paying the bills.

The project will require up to $30 billion to get off the ground, so he's currently trying to gather international investors.

"I think with Kitsault Energy, the pipeline will be shorter. The housing infrastructure is there," he says.

"So, I think this will be the thing that brings Kitsault back to life."

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