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Northern Natural Seeks to Sell West Hugoton Pipe Assets to West Texas Firm

Northern Natural Gas has requested FERC authorization to sell its West Hugoton natural gas pipeline facilities in Kansas and Oklahoma to a Midland, TX-based energy company.

The MidAmerican Energy pipeline subsidiary is seeking to sell approximately 264 miles of pipeline, ranging in diameter from three to 26 inches, and associated facilities to WTG Hugoton LP, an affiliate of West Texas Gas Inc., the fourth largest investor-owned public utility company in Texas [CP06-89, CP06-90]. The agreed-upon price is approximately $24 million for the pipe assets located in seven counties in southwestern Kansas and in Texas County, OK, according to the two companies.

WTG Hugoton has asked the Federal Energy Regulatory Commission to award it a certificate to acquire, own and operate the West Hugoton facilities, which would make it a new interstate pipeline company.

As part of the deal, Northern Natural proposes to provide stand-alone compression service, at an incremental rate, so that WTG can continue to make deliveries on the Liberal Lateral portion of the West Hugoton pipeline facilities. Neither Northern Natural nor WTG Hugoton plan to construct or remove any pipeline facilities.

WTG Hugoton has asked FERC to act on the requests by Sept. 30 of this year. The Midland firm said it will continue to provide firm and interruptible service to all shippers currently served by Northern Natural on the West Hugoton facilities.

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