Please review the proposed posting concerning the high nitrogen issue with El Paso, and feel free to make suggestions or comments. Comments need to be submitted by Wednesday October 17th at noon to make sure this get posted to the Web in a timely manner.
Contact Penny McCarran ext.5416 or John Buchanan ext. 7429

Thanks: John Buchanan
 -----Original Message-----
From: 	McCarran, Penny  
Sent:	Monday, October 15, 2001 2:51 PM
To:	Buchanan, John
Cc:	Faucheaux, Eric
Subject:	Draft Statement on High Nitrogen

DRAFT

On October 11, 2001 Northern was informed by El Paso Natural Gas that the nitrogen level in the gas being delivered into El Paso's system at the El Paso/NNG Keystone interconnect (POI # 169) exceeded El Paso's nitrogen tariff specification.  El Paso's tariff restrict the nitrogen level in the gas stream to no more than 3%.  According to El Paso, the nitrogen level on October 11 at the Keystone interconnect was 3.5%.  El Paso refused to allow deliveries from Northern into El Paso on this day.

Northern does not have a tariff specification that restricts the receipt of gas with nitrogen over a certain level.  However, Section 44 of Northern's FERC Gas Tariff states that 

	"The gas shall be commercially free from objectionable odors, solid matter, dust, gums and gum-forming constituents, or any other substance which may interfere 	with the merchantability of the gas, or cause injury to or interference with proper operation of the lines, meters, regulators, or other appliances through which it 	flows."

It is Northern's position that any gas which has a high nitrogen content that makes the gas delivered from Northern's system non-merchantable is subject to being curtailed/allocated.  Northern has reviewed the gas composition for the receipts in this area which would affect the total level of nitrogen in the gas stream.  If it becomes necessary for Northern to curtail receipts to ensure that the gas stream is merchantable to El Paso at the Keystone interconnect, gas receipts into Northern will be curtained/allocated according to the following order.  These points have been listed according the level of nitrogen in the gas stream.  The receipt point listed first has the highest level of nitrogen, the second point listed has the second highest level, etc.

		1.  NNG/Pinnacle Terry 			POI 60022
		2.  Gaines County #2			POI 401
		3.  Gaines County #3-NNG		POI 395
		4.  NNG/Altura Gaines			POI 78023
		5.  GPM Fullerton Plant			POI 36511
		6.  Adobe Plant				POI 25450
		7.  Spraberry Area			
		8.  NNG/Amerada Hess Gaines Co.    	POI 78028
		9.  Warren Eunice			POI 6751
          	          10.  Hobbs Area																	   	          11.  LLano/NNG Lea			POI 200

If El Paso refuses to allow deliveries from Northern into EL Paso Keystone, Northern may require all gas to be received from shippers in this portion of our system to conform to the gas quality specification set forth in Section 44 of Northern's FERC Gas Tariff.  Any previously granted waivers by Northern of Section 44 of its FERC Gas Tariff relating to receipts shall no longer be effective until further notice.