Wyoming: Portland utility to buy Jonah field gas

By OGJ editors
HOUSTON, Feb. 28
– Northwest Natural Gas Co., Portland, Ore., will buy gas produced by Encana Oil & Gas (USA) Inc. in Jonah field in Wyoming’s Green River basin, subject to approval by the Public Utility Commission of Oregon.

Northwest Natural expects 8-10% of the company’s average annual requirements for its utility customers to be supplied in the first 10 years of the 30-year agreement.

Northwest Natural will pay $45-55 million/year for 5 years, for a total investment of about $250 million, to cover expected drilling costs in exchange for working interests in certain sections of Jonah field. The agreement covers future and currently producing wells. It estimates more than $50 million in savings over the term of the agreement.

The commission is likely to hear the application in late April. If approved, Northwest Natural’s will include its expenditures for the gas reserves, cost of capital, and associated operating costs in its rates on an annual basis.

Jonah is considered one of the 10 largest US gas fields with more than 2 tcf equivalent of proved reserves.

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