Kinder Fully Subscribes NGPL Storage Capacity
The previously underutilized pipeline and storage assets of
Natural Gas Pipeline Company of America (NGPL) have enjoyed robust
volume growth under the management of the merged KN Energy and
Kinder Morgan. Last week, Kinder Morgan's NGPL said it has fully
subscribed its storage service with the latest of a number of
NGPL signed storage contracts for 25 Bcf of firm nominated
service. Most of the capacity was awarded under two separate
three-year contracts. NGPL's nominated storage service has capacity
of 130 Bcf and is now fully subscribed until at least Jan. 1.
"These long-term storage transactions, combined with the
previously announced rollover and new transportation and storage
services contracts, signify that our back-to-basics strategy to
focus on our core pipeline businesses is paying off," said CEO
Richard D. Kinder.
In January, NGPL signed three- and five-year contracts with
Peoples Gas, Light and Coke and North Shore Gas - subsidiaries of
longtime customer Peoples Energy - for more than 200,000 MMBtu/d of
firm transportation, plus storage (see NGI Jan. 10). Under a
contract running from Jan. 1, 2000 through April 30, 2005 NGPL will
provide Peoples with 114,000 MMBtu/d of firm capacity. A second
pact for three years will give Peoples 90,000 MMBtu/d of FT and 10
Bcf of storage. The companies also signed a letter of intent,
subject to NGPL's capacity award procedures, to provide Peoples
with 89,000 MMBtu/d of FT and 9.3 Bcf of storage from April 1, 2000
through April 30, 2003.
The contracts are the latest of several long-term firm pacts
NGPL has pursued successfully in advance of the delivery date of
its newest rival, Alliance Pipeline, due into Chicago from Canada
Last October another major NGPL customer, Nicor Gas, parent of
Northern Illinois Gas signed a three-year contract (see NGI Oct.
4). The agreement, effective April 1, covers 1 million MMBtu/d (or
about 970 MMcf/d), includes Nicor's entire storage and
transportation portfolio and accounts for nearly one-third of the
firm transportation that NGPL provides to the Chicago area.
Underutilization on NGPL was said to be a main stumbling block
that caused the failure of KN's $6 billion merger with Sempra
Energy in June. The fallout from that put Kinder and William Morgan
atop the merged Kinder Morgan and KN Energy.
Joe Fisher, Houston
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