Information was shared, but nothing was decided, and none of the independent natural gas producers think that California production will increase any significant amount because of a meeting Tuesday with Pacific Gas and Electric’s gas utility officials trying to both get and give information on two issues: new in-state hook-ups and the utility’s old gathering pipelines.

One CEO of a San Joaquin Valley exploration/production company said if anything comes of the ongoing communications effort by the large San Francisco-based utility and its holding company, most likely it will be major producers (Calpine, Enron or Vintage) that take the most advantage of it.

PG&E’s utility is meeting twice-yearly with the members of the California Natural Gas Producers Association and with its board more frequently in an attempt to gain mutual understanding and trust among a group that for decades has often been at odds with the giant utility. State regulators have encouraged the two sides to talk more.

In the case of this week’s meeting, a third draft of proposed new procedures for wellhead hook-ups and pipeline receipt points were presented, but no decision was reached on a new set of rules to be submitted to the California Public Utilities Commission at this point. A second issue focused on a commonly agreed-to methodology for conducting an auction of a portion of PG&E’s 600 miles of gathering pipelines, ranging from 2 to 20 inches in diameter and spread over Sacramento Valley and San Joaquin Valley production fields.

At one point in the past two years, a co-op of independent producers was going to buy the PG&E utility gathering system, but the proposal came apart. Some producers are talking about forming smaller, regional co-ops to buy specific portions of the gathering system in a particular production area.

A skeptical producer suspected that the utility is trying to get rid of basically older, inferior infrastructure that needs a lot of upgrading, and issues such as the transfer of rights-of-way and easements are un-addressed. He said also that there are lingering issues related to environmental and bankruptcy aspects.

A PG&E utility spokesperson said the “majority” of the utility gas gathering system could eventually be auctioned, but not all of it because some portions need to be retained to serve up to 300 existing utility customers.

“I don’t think they (PG&E) will get rid of any of its good lines,” said one producer. “They are going to get rid of the lines that are going to need serious repair and maintenance from now on. It is all going to come down to what PG&E is going to be willing to sell, and what price they are going to put on it. They are talking about charging an access fee every time you go to the data rooms set up for the various systems.”

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