PG&E; Planning to Expand Pipeline to Ease Gas Crisis

The owner of the major pipeline that transports Canadian natural gas to California said Wednesday that it is planning a multiphase expansion to help cure the gas supply crisis causing havoc in the Golden State.

PG&E; Corp. said its National Energy Group unit will start gauging interest among shippers in early January for expanding its Pacific Northwest pipeline system by an initial 200 million cubic feet a day.

The initial expansion of the line, formerly known as Pacific Gas Transmission, is designed to feed booming California gas demand by 2002.

Additional expansions of the 612-mile pipeline, which moves 2.7 billion cubic feet of Canadian gas a day to California from the British Columbia-Idaho border, are planned for 2003, 2004, 2005 and beyond, the company said.

“Gas supplies into the Pacific Northwest and California are very tight. At the same time, the market is strong and growing, and the PG&E; Gas Transmission Northwest pipeline system has been operating at or near maximum capacity levels for the greater part of the year,” Thomas King, president of San Francisco-based PG&E;’s National Energy Group, said.

Gas prices in the region have soared to astronomical levels over the last month because of skyrocketing demand, especially by gas-fired power generators in California, and fears about tight supplies.

The company said it will launch an open season Jan. 2 to determine support for the initial expansion. If it garners the necessary shipping commitments, it will aim to start construction immediately, with a start-up date as early as November 2002.

The Federal Energy Regulatory Commission indicated that, because of California’s energy crisis, it could fast-track the application process, PG&E; said.

PG&E; shares fell $1.14 to close at $20.94 on New York Stock Exchange.