Portland, Oregon - PG&E Gas Transmission Northwest (GTN) said today that it received binding precedent agreements with 25-year terms from customers for approximately 250,000 decatherms per day (250 MDth/day) of expansion capacity for service in 2003, based on results of an open season that concluded this week.

The proposed 2003 expansion will be in addition to GTN's 2002 expansion, currently pending before the Federal Energy Regulatory Commission (FERC), in which GTN proposes to add approximately 200 MDth/day in mainline capacity with partial service commencing as soon as November 2001. In total, the two expansions would increase capacity on the GTN system by more than 400 MDth/day to in excess of 3,100 MDth/day by November 2003.

"The response we received from shippers for both our 2002 and 2003 open seasons provides us a clear signal that demand for more capacity on our pipeline is very strong," said Peter G. Lund, vice president of the PG&E National Energy Group, which includes the GTN system. "New power plant development, both in the Pacific Northwest and California, is a primary catalyst behind the increased demand. Our goal is to play a primary role in serving this new demand and help the West meet its growing energy needs."

In April, GTN filed with the FERC for permission to construct its 2002 expansion. The FERC has indicated that it will process that application on an expedited basis because of the need for more energy capacity in the West. With expedited FERC review, GTN's objective is to have this first mainline expansion fully in service by the summer of 2002.

GTN is exploring the option of also seeking expedited FERC review for the 2003 expansion. The company expects to file its project application with the FERC by November 2001.

"We are exploring whether an expedited schedule could enable us to have our 2003 expansion in service by the 2002/2003 winter heating season," Lund said. "We will work closely with the FERC and other interested parties to determine whether this is feasible."

The GTN system is the most direct link between the prolific western Canadian gas supplies and the growing gas markets in the Pacific Northwest and California. GTN is the largest U.S. transporter of Canadian natural gas and is 100 percent contracted, with a current average contract term extending through 2013. The pipeline operated at near 100 percent of its capacity for much of 2000.

The GTN system includes 1,335 miles of pipeline along a 612-mile route which begins at the Idaho/British Columbia border, traversing northern Idaho, southeastern Washington and central Oregon, and terminates at the Oregon/California border, where it interconnects with the Pacific Gas and Electric Company pipeline system. The proposed expansion would add capacity to the entire length of the GTN system.

More specifics about GTN's 2003 pipeline expansion will be available on the company's pipeline operations web site, E-TRANS, early next week.