Canadian producers and California regulators are reported close to settlement of a natural gas contract dispute, Canadian federal officials say.
Talks were continuing as Canadian officials reported negotiators were working out details for a deal in the lengthy dispute involving $1 billion (Canadian) in gas sales between Alberta and California.
The California Public Utilities Commission said there must be open access to the Alberta-California pipeline system by November. A supply pool of 190 Alberta producers said that abrogates long term contracts for gas sold to California. The Alberta government said it will not permit removal of gas for spot sales unless all contract volumes are taken.
The dispute escalated this month when the Sacramento Municipal Utility District said California customers overpaid by $567 million (U.S.) in 1988, 1989, and 1990 because of what it called a cartel-like arrangement with the Canadian producer pool.
The Sacramento utility said contracts between Pacific Gas & Electric Co. Canadian unit Alberta & Southern Gas Co. (A&S) and producers prevented the utility from obtaining the lowest possible price for gas.
On the other side of the dispute, several members of the supply pool have filed suits in Alberta courts alleging A&S failed to take contract volumes. Shell Canada Ltd., Amoco Canada Ltd., and Chevron Canada Resources Ltd. filed suits totaling $412 million (Canadian).
Meanwhile, several Canadian producers have opposed restrictions to gas exports in submissions to the National Energy Board. NEB will begin hearings in Calgary Feb. 24 on requests by several groups to protect contracts.
Poco Petroleums Ltd., Calgary, said it was against action by the NEB because that could have wide ranging repercussions for the Canadian gas industry and exports to the U.S.
Brymore Energy Ltd., a gas marketer, also told NEB proposed controls on California sales could hurt the industry. It said NEB intervention would be a retrogressive step and a deterrent to sales.
A number of other intervenors questioned a move to new export controls. The Canadian Petroleum Association, Alberta Petroleum Marketing Commission, and a number of producers have sought action to protect contracts.
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