A revised version of the proposed Palomar Pipeline, whose FERC application was pulled back last year, is still needed and should be revived at the federal regulatory agency by mid-2013, NW Natural CEO Gregg Kantor told analysts during a recent 3Q2012 earnings conference.
Building the pipeline from the Rockies to the Portland, OR, metropolitan area may be still “five years out,” but it is still needed in the region, Kantor said.
Throughout most of this year, NW Natural and its Palomar partners — TransCanada Corp. and Williams Northwest Pipeline Co. — have been discussing a revised project that is more regional in nature (see Daily GPI, July 9).
“At this point we’re working on production agreements and agreements with shippers on the pipeline,” Kantor said. “A big part of the future movement of the project will be determined by the who wins and what the eventual outcome is on the outstanding request for proposals by Portland General Electric for both [gas-fired] baseload and peaking generation.
“From what we’re seeing in the way of new gas-fired electric generation in the Northwest, it is not a question of if we need a pipeline, but when.”
With shippers lined up and a new, shortened route for the pipeline, Kantor said the project partners should be in a position to re-file with the Federal Energy Regulatory Commission by the mid part of next year. The line is not likely to be in place until around five years after a new filing, he said.
NW Natural reported a 3Q2012 loss of $10.6 million, compared with a loss of $8.3 million in 3Q2011.
Kantor also talked about NW Natural’s merchant gas storage and its five-year, $250 million gas reserve utility agreement with Encana Oil & Gas (USA), which began last year (see Daily GPI, April 21, 2011).
While general weakness in the economy and natural gas prices has dampened storage, Kantor said that has not adversely affected his utility’s Mist Storage operations in Oregon. However, the Gill Ranch project is Northern California is still struggling (see Daily GPI, Aug. 4, 2011), and the focus for the upcoming year is to sign deals with more utilities for that project.
For 3Q2012, NW Natural reported that storage net income overall increased from the prior year’s quarterly totals due to “an increase in contracted capacity and lowering of operating costs.”
For the Encana gas reserves, the Portland-based gas utility will invest another $44-$55 million in 2013 to develop more long-term reserves for its 679,000 customers in Oregon and a small portion of the state of Washington.
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