With long-time nation-leading customer growth rates slowing, Portland, OR-based Northwest Natural Gas is eyeing a wider, regional role with two infrastructure projects that will enhance natural gas pipeline and storage infrastructure on the West Coast. Those plans are proceeding as envisioned, according to Northwest’s CEO Mark Dodson. Northwest on Thursday announced increased earnings in 2007 of 17% and 21% for net income and earnings-per-share, respectively ($74.5 million, or $2.78/share).

Both infrastructure projects are joint ventures that have drawn positive responses from potential stakeholders and customers, said Dodson, who called his gas utility company a “more efficient and agile company.”

With TransCanada, Northwest is pursuing the 220-mile, 36-inch-diameter Palomar Pipeline out of western Canada that potentially can interconnect with a liquefied natural gas (LNG) terminal along the Columbia River where several projects are proposed. Additionally, the Oregon utility has partnered with Pacific Gas and Electric Co. on the proposed Gill Ranch underground storage facility in northern California. Each are estimated to be $150 million projects for Northwest’s share.

“Both would put Northwest Natural in an excellent position to help the Western United States meet its growing demand for natural gas,” Dodson said. “Palomar will give us another direct connection to the interstate natural gas pipeline system, diversifying our delivery options and reinforcing supply reliability for our Oregon customers.”

While expecting the regulatory process to be “long and rigorous,” Dodson said Northwest will concentrate of regulatory approvals this year, seeking a decision next year with the pipeline in operation some time in 2010.

“We also had good news regarding the Gill Ranch,” said Dodson. He said the response has reaffirmed Northwest’s assessment that “California needs additional gas storage.”

Dodson said the partners expect to start construction of the storage facility late next year and begin operations in 2010. “Given all this we feel confident about our ability to grow the company in 2008 and the years ahead.”

While saying he could not give too many specifics about the potential bidders and responses in the Gill Ranch open season, Dodson said in addition to the potential demand for capacity expressed in the process, there were what he called “a wide variety of participants, and requests for long-term contracts from quality-credit-rated participants. The number of requests for long-term contracts was closer to our risk profile, and it confirms that this is the right project for us to be involved in.”

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