ALBERTA PRODUCERS CONSIDER SETTLEMENT

A 450-member producer pool supplying natural gas to Pan-Alberta Gas Ltd., Calgary, is considering a $192 million (U.S.) contract settlement with California customers. Two California buyers, Pacific Interstate Transmission Co. and Southern California Gas Co., agreed to pay that sum to compensate for rewriting contracts on long term gas sales. The gas moves through the Foothills Pipe Lines Ltd. system, which is a prebuilt section in Canada of the planned Alaska Natural Gas Transportation System.

Dec. 27, 1993

2 min read

A 450-member producer pool supplying natural gas to Pan-Alberta Gas Ltd., Calgary, is considering a $192 million (U.S.) contract settlement with California customers.

Two California buyers, Pacific Interstate Transmission Co. and Southern California Gas Co., agreed to pay that sum to compensate for rewriting contracts on long term gas sales.

The gas moves through the Foothills Pipe Lines Ltd. system, which is a prebuilt section in Canada of the planned Alaska Natural Gas Transportation System.

The California companies were paying the cost of transporting Alberta gas under an international agreement to pay for construction of the Foothills system.

Pan-Alberta said it expects the supply pool to approve the offer. Producers had until Dec. 22 to cast ballots.

The agreement also is subject to regulatory and third party approvals.

The contracts involved cover about $300 million/year in gas sales to the Southern California residential and institutional markets.

Southern California Gas also agreed to drop its opposition to the current toll structure on the expanded Pacific Gas Transmission Ltd. line from Alberta to California, which started up Nov. 1.

PGT is expected to apply in 1994 for regulatory approval of rolled in tolls on the new line.

Canada's National Energy Board presently approves rolled in tolls for increased volumes on existing lines.