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Questar’s Southern Trails pipeline ready to bring natural gas to California state line

June 25, 2002 — Questar Pipeline Co., has placed into service the eastern zone of its Southern Trails Pipeline.

The $100-million project is anticipated to be at full capacity by July 1, bringing 80 million cubic feet daily (MMcf/d) of much-needed natural gas to the California state line from the Rockies and northern New Mexico’s San Juan Basin.

The 700-mile, 16-inch-diameter steel pipeline was originally built to move crude oil to Southern California refineries. Questar Pipeline purchased the pipeline in 1998 to convert it to transport natural gas. Conversion activities included a thorough cleaning, construction of four new compressor stations, pipeline extensions, tie-ins, and replacement or relocation of about three percent of the line. The entire pipeline was then tested.

“We are extremely pleased to see this day come,” said Nick Rose, president and CEO of Questar Pipeline. “We applaud the dedicated employees and contractors for achieving what few thought possible as they shepherded Southern Trails through extensive environmental reviews and regulatory challenges, design and construction.

“In addition, the company had to negotiate several new right-of-way agreements with the Navajo, Hopi, and Fort Mojave nations. We appreciate their cooperation as well as that of the Federal Energy Regulatory Commission in completing this project.”

Southern Trails is divided into eastern and western zones. The eastern portion, placed into service recently, runs some 490 miles from the Blanco Hub in New Mexico’s San Juan Basin to multiple delivery points near the California state line. Plans to convert the final 210 miles from the state line to Long Beach, with a projected daily capacity of 120 MMcf, have been delayed.

“Now that we’ve begun service in Southern Trails’ eastern zone, we are turning our attention to marketing capacity in the California portion of the pipeline. The western zone runs through the heart of industrial and commercial areas in Southern California and could provide a new, reliable source of gas service,” said Rose.

At the same time, Rose indicated that, while efforts continue to put the California portion of the pipeline into natural gas service, the company has been forced by an unfavorable California Public Utility Commission (CPUC) decision to consider alternative uses for the California portion, including sale or possible conversion to other uses.

Southern Trails officials have expressed frustration with the August 2001 CPUC ruling that replaced Southern California Gas Company’s (SoCal) Residual Load Service (RLS) tariff with a new peaking rate.

“The new peaking rate, while an improvement over SoCal’s old RLS tariff, still does not level the playing field and is anticompetitive. It punishes customers who want to take partial service from a SoCal competitor, and discourages the development of new interstate pipelines such as Southern Trails inside California,” said Rose.

Questar Pipeline is a subsidiary of Questar Corp., a $3.1 billion integrated natural gas company headquartered in Salt Lake City. Through subsidiaries, Questar transports natural gas through a 2,000-mile system in Utah, Colorado, New Mexico, Arizona and Wyoming. The company also serves as the primary natural gas distributor in Utah, offering services similar to those offered by SoCal Gas and Pacific Gas and Electric in California.