SoCal Gas, Kern-Mojave Settle Dispute

The sponsors of two interstate pipeline companies and Southern California Gas Co., the nation’s largest gas utility, today said they have settled a four-year regulatory dispute, apparently clearing the way for two natural gas pipelines into Southern California.

The agreement between Kern River Gas Transmission Co., Mojave Pipeline Co., and Southern California Gas Co. must still be approved by the Federal Energy Regulatory Commission, the companies said.

Under the agreement, both Kern River and Mojave would build and operate pipelines into California to a point in the desert near Barstow, where the pipelines would merge.

From there, both systems would continue in a single, jointly owned pipeline to the oil fields of Kern County. There the gas would be burned to produce steam, to be used in bringing tar-like oil to the surface.

As a result of the settlement, SoCal Gas, Kern River and Mojave would continue to compete for customers. The companies must first, however, persuade federal regulators that sufficient competition remains.

The new pipelines had been opposed by California regulators, SoCal Gas and consumer groups on the basis that they would bypass existing utilities, leaving customers unserved by the pipeline with a heavier burden.