TENNECO <TGT> TO TRANSPORT GAS ON OPEN ACCESS
Tenneco Inc said Tennessee Gas Pipeline
Co, its largest interstate natural gas pipeline, will transport
natural gas under the open access rules of the Federal Energy
Regulatory Commission, FERC.
    In open access, gas pipelines serve purely as a transport
company, moving gas from suppliers to customers. Pipelines also
transport its own gas to customers.
    Earlier this week, Transco Energy Co <T> rejected the FERC
guidelines, saying it would not offer open access until the
regulatory body offers a solution to the exposure it faces for
gas it has bought but could not sell.
    The exposure faced by the industry stems from take or pay
contracts, under which pipelines bought gas on long-term
contracts they could not sell. The problem grew severe as
customers won cheaper sources of gas because of open access.
    Some industry analysts speculated earlier this week that
Tenneco might follow Transco's lead and close its pipelines to
open-access because of the take-or-pay issue.
    But Tenneco today said open access "is one of the steps
FERC is taking to restructure the gas industry in the U.S. FERC
is moving the industry through this restructuring now, even
before all transitional problems are solved."
    A spokesman said Tenneco faces 1.7 billion dlrs in exposure
under the take-or-pay contracts, but he had no specific figure
for Tennessee Gas, which runs 2,000 miles of pipelines from
Louisiana and Texas up to New England.
    "We remain convinced that the most critical transitional
issue facing the industry--take-or-pay--must be resolved by
FERC in the near future.
    "A failure to do so could have grave consequences for the
industry's continued ability to provide its customers with
reliable natural gas," said Tennessee Gas Transmission Co
president R.C. Thomas.
 Reuter
