VANCOUVER -- B.C. Gas has struck a deal to acquire Centra Gas from Westcoast Energy.

The company says it will purchase the company's common shares for $208 million.

B.C. Gas president John Reid says Centra has excellent growth potential with the expansion of natural gas service on Vancouver Island and the Sunshine Coast.

He says it also has the opportunity to service proposed gas-fired electricity generating plants on Vancouver Island.

Westcoast chairman Michael Phelps says the sale allows his company to redeploy funds to other high-growth pipeline projects.

Centra Gas provides natural gas to 70,000 homes and businesses, and seven pulp mills, as well as piping in propane to two-thousand customers at Whistler.

B.C. Gas will also pay $84 million to buy the preferred shares of Centra Gas, and assume Centra's debt of about $298 million.

The transaction, to be finalized on Jan. 1, is subject to provincial and regulatory approvals.