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NGPL Extends Contracts With NIPSCO

NGPL Extends Contracts With NIPSCO

Natural Gas Pipeline Company of America (NGPL) continues to move through the recontracting process like a hot knife through butter. Since Kinder Morgan took over NGPL parent KN Energy last year, the interstate pipeline subsidiary has signed multiple agreements and contract extensions for gas transportation and storage with its major shippers in the Midwest, including another deal announced last week with Northern Indiana Public Service (NIPSCO).

NGPL and NIPSCO signed a contract extending the terms of several firm transportation agreements totaling 295,100 MMBtu/d of capacity beginning Dec. 1, 2000 and Dec. 1, 2001 and continuing through Nov. 30, 2002. They also extended the terms of two storage agreements totaling 10.5 Bcf of capacity beginning Dec. 1, 2000 and April 1, 2001 and continuing through March 31, 2003. NIPSCO, a NiSource subsidiary, is a regulated utility that provides natural gas to nearly 700,000 customers and electricity to 416,000 customers across the northern third of Indiana.

"Virtually all of our operationally available capacity is sold out now until the fourth quarter of this year," said NGPL President Deborah Mcdonald in an interview.

"Basically about a third of the transportation contracts and a third of the storage contracts are up for renewal every year. We've been very successful in our efforts resigning our three major customers [NiGas, NIPSCO and Peoples]." Despite increasing competitive pressure from Northern Border and Alliance Pipeline, the pipeline also has had surprising luck signing agreements with marketers and power generators.

"In contrast to the traditional market of long-haul transportation from the Midcontinent and Louisiana to Chicago, we have been extending our horizons trying to find a new market in the marketers rather than the core LDCs. Obviously the contract that we signed earlier this year with Aquila Energy for 500,000 MMBtu of transportation capacity has also really helped us be successful in our recontracting efforts," Mcdonald said.

"We also have developed a number of new rate services for gas-fired power generators. Growth in NGPL will come from natural gas-fired generation..... In the aggregate we think we are on target to connect over 3,000 MW of gas-fired generation this year and over 3,000 MW next year as well [which would represent up to 900 MMcf/d in gas transportation capacity]."

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