Natural Gas Pipeline Company of America (NGPL) continues to movethrough the recontracting process like a hot knife through butter.Since Kinder Morgan took over NGPL parent KN Energy last year, theinterstate pipeline subsidiary has signed multiple agreements andcontract extensions for gas transportation and storage with itsmajor shippers in the Midwest, including another deal announcedyesterday with Northern Indiana Public Service (NIPSCO).

NGPL and NIPSCO signed a contract extending the terms of severalfirm transportation agreements totaling 295,100 MMBtu/d of capacitybeginning Dec. 1, 2000 and Dec. 1, 2001 and continuing through Nov.30, 2002. They also extended the terms of two storage agreementstotaling 10.5 Bcf of capacity beginning Dec. 1, 2000 and April 1,2001 and continuing through March 31, 2003. NIPSCO, a NiSourcesubsidiary, is a regulated utility that provides natural gas tonearly 700,000 customers and electricity to 416,000 customersacross the northern third of Indiana.

“Virtually all of our operationally available capacity is soldout now until the fourth quarter of this year,” said NGPL PresidentDeborah Mcdonald in an interview.

“Basically about a third of the transportation contracts and athird of the storage contracts are up for renewal every year. We’vebeen very successful in our efforts resigning our three majorcustomers [NiGas, NIPSCO and Peoples].” Despite increasingcompetitive pressure from Northern Border and Alliance Pipeline,the pipeline also has had surprising luck signing agreements withmarketers and power generators.

“In contrast to the traditional market of long-haultransportation from the Midcontinent and Louisiana to Chicago, wehave been extending our horizons trying to find a new market in themarketers rather than the core LDCs. Obviously the contract that wesigned earlier this year with Aquila Energy for 500,000 MMBtu oftransportation capacity has also really helped us be successful inour recontracting efforts,” Mcdonald said.

“We also have developed a number of new rate services forgas-fired power generators. Growth in NGPL will come from naturalgas-fired generation. You probably saw our press release about theAmeren contracts for [construction of 1,700 MW of generation alongthe NGPL system]. In the aggregate we think we are on target toconnect over 3,000 MW of gas-fired generation this year and over3,000 MW next year as well [which would represent up to 900 MMcf/din gas transportation capacity].

“Obviously another challenge is going to be [the 1.325 Bcf/d]Alliance Pipeline coming into the market this fall. It’s anyone’sguess whether that will really fill up in a short period of time. Ithink a lot of that will be coming into Chicago and moving back outon Vector. But we’re ready at Hub America to kind of serve as agiant header system [with Texas Eastern as an eastbound partner].”

Mcdonald was not prepared, however, to announce the results of arecent open season for about 100 MMcf/d of capacity that will beavailable through a new interconnection between NGPL and Tetco foreastbound transportation.

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