Shippers hoping to line up California capacity coming open on ElPaso better be ready to fight for it, according to Jerry Strange,El Paso director of transportation marketing.
“There’s 1.3 Bcf 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 Tuesday at GasMart/Power ’99.Delivery points on the capacity to be auctioned will be limited toCalifornia, and the capacity is broken up into three blocks, two ofwhich have limitations on access rights to receipt or deliverypoint, Strange said. “In addition to that we have 100 million a daycoming up on our right of first refusal to Window Rock, which isthe delivery point from El Paso into Transwestern in easternArizona that also will go up some time in the fall. The capacity isavailable the first of January, but it has a similar right of firstrefusal.” Strange said dealing with its “huge capacity turnback” isthe biggest challenge El Paso now faces.
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