Southern California Gas announced yesterday it plans to auctionits options to buy the Southern California portions of the KernRiver and Mojave Pipeline systems. The options give SoCalGas theright to purchase the California portions of the two lines, theutility’s only gas transportation competitors in the region, in2012.

One condition for CPUC approval of the merger of SoCalGas parentPacific Enterprises with San Diego Gas & Electric parent EnovaCorp. was the sale of the options. The CPUC feared exercise of theoptions would eliminate what little positive benefits were providedby the only pipeline competition that existed in the region. Thelines currently transport 1.1 Bcf/d of gas primarily from producingbasins in the Rocky Mountains and Southwest regions to largeelectric generation facilities, enhanced oil recovery markets andindustrial markets in the San Joaquin Valley, as well as markets inPG&E’s and SoCalGas’s service territories.

SoCal plans to start the auction process June 8 and finishcollecting bids in mid-July. The sale is expected to be completedSept. 1. Information about each pipeline and the terms of theoption agreements will be available on SoCal’s web site,www.socalgas.com/3rdparty. Interested parties should call JerryMcPherson at (213) 244-3972.

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