An El Paso Corp. subsidiary has renewed a contract with the Navajo Nation, which gives the Houston-based pipeline operator the right to ship natural gas across more than 900 miles of tribal lands in Arizona, Nevada, New Mexico and California. No financial details were disclosed. Three years ago El Paso Natural Gas Co. and the Navajo Nation signed an interim agreement that ended a stalemate over the fair dollar value of the gas pipeline’s access to tribal lands (see Daily GPI, Jan. 18, 2006). The interim agreement allowed El Paso to continue to transport around 2.7 Bcf/d across the disputed area, and it also gave the parties time to renegotiate a longer-term agreement for right of way (ROW) access. In September 2006 El Paso’s offer of nearly $200 million to renew a 20-year contract was rejected. At that time, the Navajo Nation demanded $440 million for the ROW, which was around twice El Paso’s original offer (see Daily GPI, Oct. 3, 2005).

Moody’s Investors Service lowered ratings on more than $3 billion in bonds related to three long-term natural gas deals. A downgrade to “A1” from “Aa3” for Merrill Lynch & Co. Inc. as the chief guarantor of the multi-year deals was the reason. Knocked down to “A1” from “Aa3” were public-sector utility financing units in California, Colorado and Texas. Earlier this month all three received upgrades on the same bonds from Moody’s (see Daily GPI, Jan. 16). The Texas Municipal Gas Acquisition & Supply Corp. had $2.3 billion in bonds (Series 2006A, 2006B, and 2008D) downgraded; Public Authority for Colorado Energy natural gas purchase revenue bonds (Series 2008) similarly were downgraded; and Roseville (CA) Natural Gas Financing Authority met the same fate on its prepayment revenue bonds (Series 2007 A). In each case the public financing was constructed to pay in advance for long-term gas supplies used by various public-sector electric utilities to generate electricity.

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