Gas Supply
Before we can deliver natural gas to homes and businesses, we need to ship it to the Northwest. That's the role of Gas Supply and the professionals who purchase and move our supplies.
NW Natural has developed a strong reputation for its gas acquisition and storage strategies. A cornerstone of this strategy has been the development of the Mist underground gas storage facility and the South Mist Pipeline. Working together, these two investments give NW Natural enough capacity to store about 14 billion cubic feet of natural gas and help manage peak winter demand and gas market price volatility.
By leveraging this infrastructure and following a disciplined financial hedging strategy, Gas Supply works to keep ahead of market volatility, as amply demonstrated over the past two winters. For the winter of 2005-06, NW Natural had already purchased and locked in prices on most all of its winter gas supply by the end of summer. As a result, the company and its customers had only modest exposure to the sharp price spike created by hurricanes later that fall. For the winter of 2006-07, early prices were unusually high. Throughout last year Gas Supply hedged at times when prices fell enough to once again be within our target hedging range. Consequently, buyers were able to lock in better prices at that time and NW Natural cut its initial rate change request in half.
A team of gas buyers in Portland, headed by Randy Friedman, Director of Gas Supply, keeps a constant eye on the market. They purchase the company's gas supplies, schedule the daily flow of gas on upstream pipelines, optimize pipeline capacity, and perform other activities. They also coordinate the receipt of customer-owned gas into NW Natural's system. The team studies the markets and keeps abreast of everything from long-term weather reports to the plans of Canadian gas producers, to the repair schedules for major transmission lines.
As a result, NW Natural customers receive the supplies they need at reasonable cost.
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