NGI The Weekly Gas Market Report

SoCal Demand Soon May Exceed Supply

A new pipeline may be needed in Southern California to eliminateimpending gas supply and infrastructure constraints, which couldbecome critical in the next few years, according to participants ata one-day roundtable last week in San Diego. Demand is expected tofar exceed supply in the burgeoning southern end of California andon both sides of the U.S.-Mexican border, where population,industrial and energy growth are surpassing expectations.

January 31, 2000

NWNG Unloads E&P to Focus on Distribution

Northwest Natural Gas announced the sale of its Canadian oil andgas exploration subsidiary, Canor Energy Ltd, for C$87.5 million incash to Celsius Energy Resources Ltd, a Canadian exploration andproduction company owned by Questar Corp.

January 31, 2000

El Paso Seeks Stay of Ruling on Enron Deal

Amid industry reports last week that Enron North American Corp.was actively trying to get out from under its conditionallyapproved large capacity contracts with El Paso Natural Gas, thepipeline sought a stay of the order. In the ruling, FERC deniedprimary rights at the prized Southern California Gas-Topock, AZ,delivery point for nearly half of the Enron affiliate’s firmtransportation capacity on El Paso.

January 31, 2000

Deliveries from Northwest Territories Begin in May

Deliveries are scheduled to start in May from Canada’s newestgas production frontier in the Northwest Territories after a groupled by Chevron Canada Resources Ltd. achieved a breakthrough inlining up approvals from a host of federal, territorial, native andenvironmental agencies.

January 31, 2000

El Paso Blames Curtailments on Scheduling Flexibility

El Paso Natural Gas openly concedes it has had to curtaildeliveries on the East End of its system between the San Juan Basinand Texas in recent months, but it said it wasn’t because it hasoversold capacity on that section of its system, as KN MarketingL.P. has alleged. Rather it’s been due to the schedulingflexibility El Paso affords shippers that allows them to use anyreceipt point on the system, up to the volume limit of theircontract.

January 31, 2000

Fuel Cells Bringing Gas-Fired Generation to Main Street

Year 2000 could be the year of the fuel cell on Wall Street asnext year is expected to see first commercialization of thetechnology on Main Street. While most consumers have yet to hear ofthe big gas-powered backyard batteries, investors certainly areaware.

January 31, 2000

CPUC Chief Sees Gas Restructuring as Sinking Ship

California’s top energy regulator thinks the momentum forrestructuring the state’s natural gas industry has lost most of itssteam. Responding to questions during a break at a statewide energyroundtable in San Diego last Tuesday, Richard Bilas, president ofthe California Public Utilities Commission, said he is unsure whenthe regulators will be able to make recommendations to the statelegislature for further gas unbundling.

January 31, 2000

CNG Conducting Unauthorized Storage Activity, FERC Says

FERC last week found that CNG Transmission Corp. has beenconstructing, converting and interconnecting gas storage wells atits Tioga complex in Pennsylvania without prior Commissionauthorization.

January 31, 2000

CA Lawmaker Says Generation Buyers Paid Too Much

In a surprising bit of candor, the chief political architect ofCalifornia’s 1996 electric industry restructuring law last weekrevealed that out-of-state energy companies paying high prices forgeneration assets, exceeded state lawmakers goals of gettingconsumers out from under the enormous stranded costs of the state’sthree major investor-owned utilities.

January 31, 2000

Natural Can Declare Shippers Liable for Damages

After giving Natural Gas Pipeline Co. of America (NGPL) asecond bite at the apple, FERC last week said the pipeline hadsufficiently defended a proposed tariff revision that would allowit to hold its shippers liable for damages resulting fromlower-quality gas entering its system.

January 31, 2000