fyi
 -----Original Message-----
From: 	Gerych, Zdenek  
Sent:	Tuesday, November 06, 2001 3:50 PM
To:	Gonzales, Eric; Harris, Clay; Rao, V; Curran, Greg; Cullen, John; McMillan, James; Mcgarry, Michael; Miller, Stephanie; Gomez, Julie A.; Slaughter, Jeff G.; Fuller, Dave
Cc:	Lee, Kyu-Bong
Subject:	RE: Northwest Pipeline Discussions: LNG Terminal


Dear Colleagues:

Yesterday, Jeff Slaughter of ENA, Kyu-bong Lee and myself met with Northwest Natural Gas'  Nick Potts, Director - Gas Storage Operations, Charles Stinson, General Manager - Engineering Services & Storage, and Randy Friedman, Manager - Gas Supply.

Full report on the meeting is attached, here is a summary of the main points:

They do not object to the development of an LNG terminal by Enron on the Columbia river or to Enron's efforts to negotiate a land lease option at Port Westward.  Their pipeline system is not set up to take advantage of the regasified LNG to supply their core customers in Portland but they would consider buying directly from us for customers in the Port Westward, St. Helens, Longview area if the price was right, i.e., the lower of Sumas and Stanfield price MINUS some discount from the NW Pipeline postage stamp tariff.
They perceive some risk in relying on an LNG supply with price formula linked to Nymex that would not provide a floor for the LNG producer.
They would like to see the LNG terminal in southern Oregon, where the NW pipeline system telescopes down to 10 inches, but realize that the terminal would be lost somewhere around Coos Bay with over 150 miles to go to connect with the PGT line across the Coastal Range and the Cascades, through an area of strong environmental concerns.
At this point, the best option for Enron seems to be (pending positive report on navigational issues on the Columbia from Golder): 
a terminal close to the N/W Pipeline in the Port Westward/Longview area
selling gas directly to local customers (i.e., bypassing NW P/L transportation charges)
selling rest of gas on NW P//L
Eventually, we will need to talk to the Kelso Beaver (KB) Pipeline which operates the small diameter line to Port Westward.

Please give me a call if you have any questions.

Best,

Z