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Navajo Leader: Gas on El Paso Will Still Flow Even if ROW Pact Not Brokered by Deadline

Natural gas will continue to flow on El Paso Natural Gas pipeline facilities that are located on Navajo Nation lands even if the two sides fail to renew a rights-of-way (ROW) contract by the Oct. 17 expiration deadline, said the Navajo Nation attorney general.

"We're not trying to kick them [El Paso] off of the reservation," Navajo Nation AG Louis Denetsosie told NGI last Wednesday. If El Paso and the Navajo Nation don't resolve their ROW contract dispute by the Oct. 17 deadline, "we'll continue to argue about it and they'll [El Paso] continue to pump gas." He said there would be no disruption to the 2.7 Bcf/d of El Paso capacity on tribal lands that serve the western United States, primarily Arizona, Nevada, New Mexico and California.

"They're the ones who are saying the sky's falling," Denetsosie said.

The Navajo Nation has rejected El Paso's offer of nearly $200 million to renew a 20-year contract for the ROW to transport gas over 900 miles of land in Navajo territory in Northeast Arizona and Northwest New Mexico, El Paso said recently (see NGI, Oct.3). The Navajo Nation has requested $440 million, or twice El Paso's offer, according to the pipeline.

With negotiations at a standstill, El Paso has filed an application asking the Interior Department to extend the ROW contract without the consent of the tribe so that it can continue transporting natural gas over tribal lands from the San Juan Basin to customers in the Southwest. Denetsosie said the Navajo Nation plans to file a response before the Oct. 17 deadline.

El Paso argues that there is "no justification" for the $440 million that the Navajo Nation was demanding, but Denetsosie begs to differ. "We certainly can justify the amounts we're asking for," he said, adding that 41,000 homes on the tribal lands are without natural gas service and the unemployment rate was 50% on the reservation. "Historically, we've not received any consideration for our lands. We're just trying to even out the balance."

Denetsosie further noted that El Paso competitors, such as Transwestern Pipeline, have agreed to "comparable terms" to renew their ROW contracts with the Navajo Nation. He said the tribe recently reached a 10-year ROW agreement with Transwestern, which runs parallel to El Paso.

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