Gill Ranch Storage, LLC Announces Successful Open Season, Plans to Proceed with Development...

Gill Ranch Storage, LLC Announces Successful Open Season, Plans to Proceed with Development of Natural Gas Storage Facility in Central California

FRESNO, Calif.--(Business Wire)--Gill Ranch Storage, LLC (GRS), a subsidiary of Northwest Natural
Gas Company, dba NW Natural (NYSE:NWN), today announced the successful
conclusion of its open season to develop a new, California-regulated
underground natural gas storage facility. The Gill Ranch storage
facility is located near Fresno and would be developed in conjunction
with Pacific Gas and Electric Company (PG&E).

The first phase of the project is estimated to have an initial
total capacity of about 20 billion cubic feet (Bcf), with 15 Bcf of
that capacity owned by GRS and 5 Bcf owned by PG&E. The estimated
first-phase completion date is late 2010. The facility will use
depleted sandstone natural gas reservoirs and has the potential for
additional development if future market demand is favorable. The Gill
Ranch natural gas storage project is located about 25 miles west of
Fresno.

Investment by GRS in the initial phase of the project, if
constructed, is expected to be approximately $150 million. Capital
expenditures in 2008 by GRS are estimated at approximately $10 million
for various project permitting and development activities. GRS will
initially serve as operator of the storage facility and will own 75
percent of the capacity and investment in the first phase of the
project and PG&E will own 25 percent.

"We were extremely encouraged by the level of interest we received
from potential customers toward this new storage facility, which was
considerably greater than the project's capacity and clearly confirms
the strong need for storage in this region," said Keith White,
president of GRS. "Given the strong response, we will take the next
step of filing for a permit and proceed with development."

In mid-2008, GRS expects to file an application with the
California Public Utilities Commission (CPUC) for a Certificate of
Public Convenience and Necessity (CPCN), authorizing it to construct
facilities and provide service at market-based rates. The CPCN process
is expected to take about a year to complete, including environmental
review under the California Environmental Quality Act. GRS will also
obtain other required permits and approvals.

Anticipated key project milestones include:

-- CPCN/GRS tariff filed with CPUC Mid-2008

-- Contracts executed Late 2008

-- CPCN issued Mid-2009

-- Construction started Late 2009

-- In-service Late 2010

GRS and PG&E will each own a portion of the overall project,
holding undivided interests in the proposed facility. Each owner will
separately market its own share of storage capacity in the project.
The project includes the storage field, a 25-mile pipeline connecting
the storage field to PG&E's gas transmission system, compression
equipment and other facilities.

About Gill Ranch Storage, LLC & Northwest Natural Gas Company
(NYSE:NWN)

Gill Ranch Storage, LLC is a wholly owned subsidiary of Northwest
Natural Gas Company, dba NW Natural, whose predecessors have been
providing gas service to the Pacific Northwest since 1859. NW Natural,
based in Portland, Oregon, provides reliable, cost-effective natural
gas service to more than 650,000 residential, commercial, and
industrial customers through 15,000 miles of mains and service lines
in western Oregon and southwestern Washington. NW Natural is subject
to regulation of its utility operations by the states of Oregon and
Washington. Since 1989, the company has operated its Mist underground
storage field (16 Bcf capacity) to serve its utility customers and the
regional interstate storage market, overseen by the Federal Energy
Regulatory Commission. NW Natural formed Gill Ranch Storage, LLC to
develop the Gill Ranch project. The new subsidiary is legally separate
from NW Natural's Oregon and Washington utility operations, and is
dedicated to serving the Gill Ranch Storage facility and the
California market. Please see www.gillranchstorage.com or
www.nwnatural.com for more information.

Gill Ranch Storage LLC/NW Natural
Media contact
Steve Sechrist, 503-220-2594
or
Investor contact
Bob Hess, 503-220-2388

Copyright Business Wire 2008