The previously underutilized pipeline and storage assets ofNatural Gas Pipeline Company of America (NGPL) have enjoyed robustvolume growth under the management of the merged KN Energy andKinder Morgan. Last week, Kinder Morgan’s NGPL said it has fullysubscribed its storage service with the latest of a number ofdeals.

NGPL signed storage contracts for 25 Bcf of firm nominatedservice. Most of the capacity was awarded under two separatethree-year contracts. NGPL’s nominated storage service has capacityof 130 Bcf and is now fully subscribed until at least Jan. 1.

“These long-term storage transactions, combined with thepreviously announced rollover and new transportation and storageservices contracts, signify that our back-to-basics strategy tofocus on our core pipeline businesses is paying off,” said CEORichard D. Kinder.

In January, NGPL signed three- and five-year contracts withPeoples Gas, Light and Coke and North Shore Gas – subsidiaries oflongtime customer Peoples Energy – for more than 200,000 MMBtu/d offirm transportation, plus storage (see NGI Jan. 10). Under acontract running from Jan. 1, 2000 through April 30, 2005 NGPL willprovide Peoples with 114,000 MMBtu/d of firm capacity. A secondpact for three years will give Peoples 90,000 MMBtu/d of FT and 10Bcf of storage. The companies also signed a letter of intent,subject to NGPL’s capacity award procedures, to provide Peopleswith 89,000 MMBtu/d of FT and 9.3 Bcf of storage from April 1, 2000through April 30, 2003.

The contracts are the latest of several long-term firm pactsNGPL has pursued successfully in advance of the delivery date ofits newest rival, Alliance Pipeline, due into Chicago from CanadaOct. 1.

Last October another major NGPL customer, Nicor Gas, parent ofNorthern Illinois Gas signed a three-year contract (see NGI Oct.4). The agreement, effective April 1, covers 1 million MMBtu/d (orabout 970 MMcf/d), includes Nicor’s entire storage andtransportation portfolio and accounts for nearly one-third of thefirm transportation that NGPL provides to the Chicago area.

Underutilization on NGPL was said to be a main stumbling blockthat caused the failure of KN’s $6 billion merger with SempraEnergy in June. The fallout from that put Kinder and William Morganatop the merged Kinder Morgan and KN Energy.

Joe Fisher, Houston

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