PRODUCERS REJECT A&S OFFER

Alberta producers last week rejected Alberta & Southern Gas Ltd.'s price proposal of an average $1.50 (U.S.)/MMBTU by a narrow margin, but it may not be dead yet. Producers may ask Alberta to agree to an extension to allow more contract talks. Current A&S wellhead purchase contracts, calling for $1.84/MMBTU, expired Aug. 1. A&S, Calgary, is the buying arm of Pacific Gas & Electric Co., San Francisco. A previous offer that averaged $1.40 (U.S.)/Mcf was rejected by 190 producers in the A&S

Aug. 5, 1991

Alberta producers last week rejected Alberta & Southern Gas Ltd.'s price proposal of an average $1.50 (U.S.)/MMBTU by a narrow margin, but it may not be dead yet.

Producers may ask Alberta to agree to an extension to allow more contract talks. Current A&S wellhead purchase contracts, calling for $1.84/MMBTU, expired Aug. 1.

A&S, Calgary, is the buying arm of Pacific Gas & Electric Co., San Francisco.

A previous offer that averaged $1.40 (U.S.)/Mcf was rejected by 190 producers in the A&S supply pool.

A&S also proposed arbitration if a new contract could not be negotiated by the end of July. Under binding arbitration, an interim price would be set until arbitrators reached a price decision that would be effective until July 31, 1992.

Alberta can charge a fine of $1 /Mcf on gas shipments not covered by a price agreement after July 31. PG&E could face fines of $750,000/day.

A new contract requires approval by a majority of producers in the pool representing 60% of volume shipped.