Gill Ranch Storage, LLC Breaks Ground on 20 Bcf Natural Gas Storage Facility for California Customers

Gill Ranch Storage, LLC, a subsidiary of NW Natural (NYSE: NWN), today announced it has begun construction of a new underground natural gas storage facility at Gill Ranch near Fresno. In 2007, NW Natural entered into a joint project agreement with Pacific Gas & Electric Company, a subsidiary of PG&E Corporation (NYSE: PCG), to develop the project.

The Gill Ranch natural gas storage project will provide approximately 20 billion cubic feet (Bcf) of underground gas storage once the initial phase is completed, targeted for August 2010. The storage development will utilize depleted, sandstone natural gas reservoirs. NW Natural’s share of the total project cost remains estimated at $160 to $180 million, representing the company’s 75 percent share of the costs for the initial phase of the project. Gill Ranch Storage is located about 25 miles west of Fresno and will include an approximately 27-mile, 30-inch pipeline, which will connect to the PG&E Line 401 north of Panoche, Calif.

"Breaking ground today marks a key milestone in the development of the Gill Ranch Storage facility,” said Charlie Stinson, vice president of engineering and operations for Gill Ranch. "This action follows receipt of the necessary permits to begin construction, and demonstrates our commitment to the project timeline and projected costs. We will be creating 350 jobs locally during the construction phase.”

About Gill Ranch Storage, LLC & NW Natural

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 about 660,000 residential, commercial, and industrial customers through 15,000 miles of mains and service lines in western Oregon and southwestern Washington. Since 1989, NW Natural has operated its 16 Bcf Mist underground storage field to serve its utility customers and the regional interstate storage market. NW Natural formed Gill Ranch Storage, LLC to develop the Gill Ranch storage facility to serve the California market. Additional information is available at www.gillranchstorage.com or www.nwnatural.com.