TransCanada and NW Natural Form Palomar Gas Transmission Joint Venture



    Partners Propose New Natural Gas Pipeline for Oregon

    PORTLAND, ORE., August 6 /CNW/ - Palomar Gas Transmission LLC (Palomar),
a newly formed joint venture of TransCanada Corporation (TransCanada)
(NYSE:  TRP)(TSX:TRP) and Northwest Natural Gas Company (NW Natural) (NYSE:  NWN),
announced today a proposal to build a natural gas pipeline that would serve
growing markets in Oregon, the Pacific Northwest, and the western U.S. If
approved, the new transmission line is scheduled to begin service in late
2011.

    Palomar was formed by TransCanada and NW Natural to design, construct,
and own the Palomar pipeline. TransCanada and NW Natural are equal owners of
the joint venture. TransCanada's Gas Transmission Northwest System (GTN),
headquartered in Portland, will operate the proposed pipeline. The partners
are seeking a federal certificate to build and operate a pipeline extending
approximately 220 miles from northwestern Oregon to north-central Oregon.

    The Palomar pipeline will connect TransCanada's existing GTN System in
central Oregon with NW Natural's distribution system near Molalla, Oregon,
approximately 30 miles southeast of Portland. NW Natural's utility operations
has agreed to contract for about 100 million cubic feet per day of capacity on
the 36-inch-diameter pipeline.

    "NW Natural currently depends on a single interstate pipeline for its
supply, approximately two-thirds of which comes through the Columbia Gorge,"
said Gregg Kantor, president and chief operating officer of NW Natural. "The
Palomar pipeline would significantly diversify our delivery options and
enhance reliability for NW Natural's customers." NW Natural serves about
641,000 residential, business, and industrial customers in Oregon and
southwest Washington.

    NorthernStar LLC, developer of the proposed Bradwood Landing liquefied
natural gas (LNG) terminal, may elect to take capacity on Palomar should the
Bradwood Landing terminal and the Palomar pipeline be constructed.

    "This project is being designed so that, if an LNG terminal is
constructed on the Columbia River, the Palomar pipeline can be extended to
serve it," Kantor said.

    The total cost of the project is estimated to be between $600-700 million
in current dollars if both proposed sections are built.

    Palomar will request preliminary environmental approval for the project
from the Federal Energy Regulatory Commission (FERC), the pipeline's principal
regulator. Even before that filing is made, Palomar will begin the public
engagement process in which parties, including landowners, will have the
opportunity to ask questions, register comments, and provide input into the
overall pipeline certificate process.

    TransCanada is a leader in the responsible development and reliable
operation of North American energy infrastructure. TransCanada's network of
more than 36,500 miles of pipeline taps into virtually all major gas supply
basins in North America. TransCanada is one of the continent's largest
providers of gas storage and related services with approximately 360 billion
cubic feet of storage capacity. A growing independent power producer,
TransCanada owns, or has interests in, approximately 7,700 megawatts of power
generation in Canada and the United States. TransCanada's Gas Transmission
Northwest system, headquartered in Portland, has been operating in Oregon
since 1963.

    NW Natural, also headquartered in Portland, is the largest independent
natural gas utility in the Pacific Northwest, serving approximately 641,000
home, business, and industrial customers in Oregon and southwest Washington.

    (All dollar figures are in U.S. dollars.)

    FORWARD-LOOKING INFORMATION

    This news release may contain certain information that is forward-
looking and is subject to important risks and uncertainties. The words
"anticipate," "expect," "may," "should," "estimate," "project, "outlook,"
"forecast" or other similar words are used to identify such forward-looking
information. All forward-looking statements are based on TransCanada's beliefs
and assumptions based on information available at the time such statements
were made. The results or events predicted in this information may differ from
actual results or events. Factors which could cause actual results or events
to differ materially from current expectations include, among other things,
the ability of TransCanada to successfully implement its strategic initiatives
and whether such strategic initiatives will yield the expected benefits, the
availability and price of energy commodities, regulatory decisions, changes in
environmental and other laws and regulations, competitive factors in the
pipeline and energy industry sectors, construction and completion of capital
projects, access to capital markets, interest and currency exchange rates,
technological developments and the current economic conditions in North
America. By its nature, such forward-looking information is subject to various
risks and uncertainties which could cause TransCanada's actual results and
experience to differ materially from the anticipated results or other
expectations expressed. For additional information on these and other factors,
see the reports filed by TransCanada with Canadian securities regulators and
with the U.S. Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on this forward-looking information, which is given as of
the date it is expressed in this news release or otherwise, and TransCanada
undertakes no obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events or
otherwise, except as required by law.

    The results or events predicted in this information may differ from
actual results or events. Factors which could cause actual results or events
to differ materially from current expectations include, among other things,
the ability of Palomar Gas Transmission to obtain the needed permits, gather
landowner approvals, complete any needed financing , and the typical
construction risks inherent in pipeline projects for materials and labor
availability.

    This release and other information made by NW Natural from time to time
may contain forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance, and other statements that are other than statements of
historical facts. NW Natural's expectations, beliefs and projections are
expressed in good faith and are believed to have a reasonable basis. However,
each such forward-looking statement involves uncertainties and is qualified in
its entirety by reference to the factors described in Part I, Item 1A, "Risk
Factors," and "Forward-Looking Statements" following Part II, Item 7A, in NW
Natural's 2006 Annual Report on Form 10-K, and in "Forward-Looking Statements"
following Part I, Item 2, of NW Natural's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2007, that could cause the actual results of NW
Natural to differ materially from those projected in such forward-looking
statements.

    All subsequent forward-looking statements, whether written or oral and
whether made by or on behalf of TransCanada or NW Natural, also are expressly
qualified by these cautionary statements. Any forward-looking statement speaks
only as of the date on which such statement is made, and the companies
undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. New factors emerge from time
to time and it is not possible for the companies to predict all such factors,
nor can they assess the impact of each such factor or the extent to which any
factor, or combination of factors, may cause results to differ materially from
those contained in any forward-looking statement.




For further information:

For further information: Media Inquiries: Steve Sechrist (NW Natural)
503-220-2594 David Dodson (Palomar/GTN) 503-833-4731 Shela Shapiro
(TransCanada) 800-608-7859 or Investor Inquiries: Bob Hess (NW Natural)
503-220-2388 Myles Dougan (TransCanada) 800-361-6522, ext. 7911

Organization Profile

PALOMAR GAS TRANSMISSION LLC

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