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El Paso, Navajo Nation Broker Interim Deal to End ROW Contract Stalemate

El Paso Natural Gas and the Navajo Nation signed an interim agreement Friday that ends a months-long stalemate over the fair dollar value of the gas pipeline's access to tribal lands in western states.

The arrangement provides more time, until Dec. 31, 2006, for the two sides to negotiate a longer term deal involving right-of-way (ROW) access to Navajo Nation land, according to the El Paso Corp. pipeline. El Paso declined to say how much it paid to temporarily resolve the impasse over its renewal of the ROW contract with the Navajo Nation, which expired last October.

Negotiations between the two sides hit a snag last September when the Navajo Nation rejected El Paso's offer of nearly $200 million to renew a 20-year contract for the ROW to transport natural gas over 900 miles of land in Navajo territory in Northwest Arizona and Northwest New Mexico. The Navajo Nation demanded $440 million, or twice El Paso's offer (see Daily GPI, Oct. 3, 2005).

El Paso at the time called the cash demands of the Navajo Nation "hugely inflated." But the Navajo Nation Attorney General Louis Denetsosie disputed the pipeline's claim. "We can certainly justify the amounts we're asking for...Historically, we've not received any consideration for our lands. We're just trying to even out the balance," he told NGI (see Daily GPI, Oct. 6, 2005).

During the contract stand-off there was no disruption to the 2.7 Bcf/d of gas that El Paso ships over the tribal lands to serve the western United States, primarily Arizona, Nevada, New Mexico and California.

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