Shippers hoping to line up firm capacity to California on ElPaso better be ready to fight for it, according to Jerry Strange,El Paso director of transportation marketing.
“There’s 1.3 Bcf/d coming up the first of January. It will besubject to a right of first refusal posting around the first ofSeptember. The timeline on that will be 20 business days for openbidding, and there’s a couple days to select a contract, andthere’s a five-business-day period where Dynegy has the right offirst refusal on those contracts and then another two or three daysto award the contracts.
“Those of you who went through our sale of this before, we willsell it the way it’s most effective for El Paso on an economicbasis because that’s the reality of the world. The paradigms allcrashed in ’96 on how capacity like this is sold. And so myadmonition to everybody is bid early and bid often because it’sgoing to be a very competitive situation.”
Strange made his remarks in Dallas last week at NGI’sGasMart/Power ’99. Delivery points on the capacity to be auctionedwill be limited to California, and the capacity is broken up intothree blocks, two of which have limitations on access rights toreceipt and delivery points, Strange said. “In addition to that wehave 100 million a day coming up on our right of first refusal toWindow Rock, which is the delivery point from El Paso intoTranswestern in eastern Arizona that also will go up some time inthe fall. The capacity is available the first of January, but ithas a similar right of first refusal.” Strange said dealing withits “huge capacity turnback” is the biggest challenge El Paso nowfaces.
Joe Fisher, Dallas
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