FERC Okays NW Natural Interstate Storage Service

In an effort to improve the reliability of the Pacific Northwest's natural gas supply, the Federal Energy Regulatory Commission has approved an application by NW Natural Gas Co. to provide storage services to the interstate gas market. With FERC's ruling, NW Natural will be able to use the surplus of its 10 Bcf of underground storage capacity at Mist, OR, to help address the region's energy challenges.

NW Natural said it expects to file with FERC with regard to rates within the next 30 days. Upon approval, the company said it will begin supplying interstate storage services with the surplus space currently not needed for its core market requirements. The Mist storage facility is located in the company's own depleted underground fields about 50 miles northwest of Portland.

NW Natural said that it is already currently involved in negotiations with its first four potential storage customers with contracts pending. The company said revenues will impact earnings for 2001.

"This move is another in a series of developments, such as our recently announced agreements to provide gas or pipeline capacity to serve electric-generation projects and the return of industrial clients to gas-buying services, that will continue to add to our profitability,'' said Richard G. Reiten, CEO of NW Natural.

The company said it is planning to expand its storage capacity on the site in the next few years to serve more interstate customers as well as its own market. NW Natural said it currently has the ability to send out 245 MMcf/d from storage to its customers and its interstate customers. It also owns two liquefied natural gas storage facilities, one in Portland and one on the Oregon coast.

Just over a month ago, NW Natural inked gas service agreements for power generation with Clark Public Utilities in Vancouver, WA, and Wah Chang, a specialty metal and chemical manufacturer based in Albany, OR (see NGI, April 23). NW Natural said the agreements will allow both organizations to produce electricity using their own generators, and they will be able to do it with cheaper gas than they could get in the wholesale market.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.