Kinder Morgan’s Natural Gas Pipeline Company of America (NGPL)has convinced another of its long-time customers to re-up, signingthree and five year contracts with Peoples Gas, Light and Coke andNorth Shore Gas — subsidiaries of Peoples Energy — for morethan 200,000 MMBtu/d of firm transportation, plus storage. Thecompany also is pursuing a new agreement with Peoples for anadditional 9.3 Bcf of storage and various FT deals for up to159,000 MMBtu/d.

Under a contract running from Jan. 1, 2000 through April 30,2005 NGPL will provide Peoples with 114,000 MMBtu/d of firmcapacity. A second pact for three years will give Peoples 90,000MMBtu/d of FT and 10 Bcf of storage.

The companies also signed a letter of intent, subject to NGPL’scapacity award procedures, to provide Peoples with 89,000 MMBtu/dof FT and 9.3 Bcf of storage service from April 1, 2000 throughApril 30, 2003. It also includes an additional 30,000 MMBtu/d ofsummer-only FT for two years and 40,000 MMBtu/d of FT for one year.

The contracts are the latest of several long-term firm pactsNGPL has pursued successfully in advance of the delivery date ofits newest rival, Alliance Pipeline, due into Chicago from CanadaOct. 1.

While the Peoples Energy subsidiaries “will be purchasing gasoff Alliance and providing hub services” for the new pipeline, “asignificant amount of our storage and pipeline service remains withNGPL,” according to Peoples spokesman Luis Diaz-Perez. And whatconvinced them to sign on NGPL’s dotted line? “Economic pricing andoperating flexibility,” Diaz-Perez said.

Last October another major NGPL customer, Nicor Gas, parent ofNorthern Illinois Gas signed a three-year contract for 1 millionMMBtu/d. It includes Nicor’s entire storage and transportationportfolio. (See Daily GPI, Oct. 1, 1999)

Just days earlier NGPL signed a new customer, marketer Aquila, to atwo-year contract for about 500,000 MMBtu/d of FT. At the time apipeline spokesman said with the two deals NGPL had 99% of its 3.3Bcf/d capacity booked. A feature of the Aquila contract was itsflexibility and varied pricing terms. (See Daily GPI, Sept. 29, 1999)

The latest agreements assure the trend will continue. “We havebeen very successful in renegotiating roll-overs and signing newcustomers such as Aquila,” said Kinder Morgan spokesman LarryPierce. “It’s been going very well.”

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