Marketers alleging affiliate preference in the sale of storagegas by Frontier Gas Storage to Prairielands Energy Marketing havetotally misrepresented the situation, Frontier Gas and WillistonBasin Interstate Pipeline (WBI) told the Federal Energy RegulatoryCommission [CP85-221-105].

Two of the three marketers, KN Services and Rainbow Gas, havebought a third of the gas sold by Frontier over the last twelvemonths under similar rates, terms and conditions as those in therecent contract signed with Prairielands. “It simply is incredibleto believe that either Williston Basin or Frontier could have doneanything to discriminate against either [marketer] while at thesame time selling them such large quantities of gas, which theymore than willingly purchased,” Frontier and WBI said. While theintervenors complained they were unable to buy gas in May, Frontierpointed out that 19 different marketers had bought storage gas overthe 12 months ending in April. During those 12 months Prairielandsbought about 1.2 Bcf out of Frontier, while Rainbow and KNS boughtabout 4.5 Bcf.

Frontier/WBI also said there was no basis for Rainbow’s claimthat it had an inherent right to buy the Frontier gas. Nowhere inits tariff or any order pertaining to Frontier Storage is there anyprovision giving any third party the “right” to the storage gas.

The marketers had claimed Frontier was giving preference toPrairielands in a May 12, 1998 contract filed with FERC for thesale of up to 30,000 MMBtu/d over twelve months. (See NGI, May 8,1998) Frontier was formed in the early 1980s by WBI’s predecessor,Montana Dakota Utilities (MDU), to resolve its take-or-payliabilities. Frontier’s purpose was to purchase all of the gas thatMDU was obligated to buy from producers, store it in MDU’s storagefields, and then resell it. More than 50 Bcf of the 59 Bcfinventory has been sold.

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