Northwest Pipeline

Building With Care

Our 1995 mainline expansion projects resulted in major archeological findings at Bear River Bend in southwestern Wyoming. Prehistoric hunter-gatherer groups intermittently used the area as a campsite over a long period of time. Carbon dating techniques indicated that the artifacts uncovered are at least 2,760 years old. Our pipeline project, which conformed its schedule to the archeological work, is seen in the background.

Northwest Pipeline's 4,000-mile system transports natural gas from major basins in western Canada, Wyoming, Colorado and New Mexico to Pacific Northwest and California markets. System design capacity is 2.6 billion cubic feet a day (Bcfd); seasonal storage capacity is 23.6 Bcf.

Northwest Pipeline has earned a reputation for being the energy lifeline to the Pacific Northwest. In 1995, we added to that reputation by completing two major mainline expansions. And we made some friends along the way. An Oregon farmer, whose land is traversed by the pipeline, took the time to write: "I am sure it was one of the most difficult areas of construction because of some very steep hills and two stream crossings. The right of way has been restored and, if anything, it looks better than before. I had anticipated problems. We haven't had any at all."

Selected Financial Data (dollars in millions)	1995	1994	1993
Revenues	$255.20	$238.50	$276.50
Operating profit	115.7	104.1	98.8
Identifiable assets*	1,147.50	1,028.00	1,032.60
Operating profit as % of average assets	10.60%	10.10%	9.40%
Capital expenditures	130.5	62.6	175.7
Depreciation	34.9	33.9	30.7
Operating Statistics
Throughput (TBtu)	826	679	624
Employees (December 31)	603	540	549
*Defined in Note 16 of the Notes to Consolidated Financial Statements, page 53.

Key Points

• For the seventh consecutive year, we set a volume record, representing incremental business on the system.
• Placed two mainline expan sions into service in December 1995 - ahead of schedule and $4 million under budget. These expansions, backed by long-term, firm-transportation contracts, increase mainline capacity by 144 million cubic feet a day (MMcfd).
• Increased delivery capacity of a storage field in Washington by 22 percent in the fourth quarter, to 550 MMcfd. This is the first part of a five-year program that will nearly double deliverability of this storage field to 850 MMcfd by 2001. Stored gas can provide an economically super ior way for customers to meet their peak-demand requirements.
• Received a favorable FERC decision in a rate case that set rolled-in, not incremental, rates for our 1993 mainline expansion. Rolled-in treatment allows all customers to pay the same rate for service. At year-end 1995, our serv ices were supported by an average contract life of more than 11 years.
• Placed new rates associated with 1995 mainline expansions into effect in February 1996. Settlement of this case is being sought and should provide customers with three to five years of rate stability while letting us manage costs and maximize throughput to achieve superior returns.
• We expect 1996 results to exceed those of 1995, primarily because of the mainline expansions now in service.
• We plan to utilize existing facilities to increase throughput during the next several years, and then incrementally expand the system for specific customers. Through increased customer communications, analysis of our service-delivery process and creation of a customer team, we are adding value to our services that sets us apart in the industry. Residential and commercial growth in the Pacific Northwest significantly exceeds the national average and supports this strategy.