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Frontier Hits False Charges by Marketers

June 22, 1998
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Frontier Hits False Charges by Marketers

Marketers alleging affiliate preference in the sale of storage gas by Frontier Gas Storage to Prairielands Energy Marketing have totally misrepresented the situation, Frontier Gas and Williston Basin Interstate Pipeline (WBI) told the Federal Energy Regulatory Commission [CP85-221-105].

Two of the three marketers, KN Services and Rainbow Gas, have bought a third of the gas sold by Frontier over the last twelve months under similar rates, terms and conditions as those in the recent contract signed with Prairielands. "It simply is incredible to believe that either Williston Basin or Frontier could have done anything to discriminate against either [marketer] while at the same time selling them such large quantities of gas, which they more than willingly purchased," Frontier and WBI said. While the intervenors complained they were unable to buy gas in May, Frontier pointed out that 19 different marketers had bought storage gas over the 12 months ending in April. During those 12 months Prairielands bought about 1.2 Bcf out of Frontier, while Rainbow and KNS bought about 4.5 Bcf.

Frontier/WBI also said there was no basis for Rainbow's claim that it had an inherent right to buy the Frontier gas. Nowhere in its tariff or any order pertaining to Frontier Storage is there any provision giving any third party the "right" to the storage gas.

The marketers had claimed Frontier was giving preference to Prairielands in a May 12, 1998 contract filed with FERC for the sale of up to 30,000 MMBtu/d over twelve months. (See NGI, May 8, 1998) Frontier was formed in the early 1980s by WBI's predecessor, Montana Dakota Utilities (MDU), to resolve its take-or-pay liabilities. Frontier's purpose was to purchase all of the gas that MDU was obligated to buy from producers, store it in MDU's storage fields, and then resell it. More than 50 Bcf of the 59 Bcf inventory has been sold.

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