UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report:
October
17,
2005
(Date
of Earliest
Event Reported: October 17, 2005)
EL
PASO
NATURAL GAS COMPANY
(Exact
name of
Registrant as specified in its charter)
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Delaware
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1-2700
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74-0608280
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(State
or
other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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El
Paso
Building
1001
Louisiana
Street
Houston,
Texas
77002
(Address
of
principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (713) 420-2600
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
8.01 Other Information
On
October 17, 2005,
we announced that we expect our right-of-way agreement across lands held by
the
United Stated in trust for the Navajo Nation to expire at midnight tonight.
We
do not expect any interruption in service to its customers. A
copy of the press release is attached hereto as Exhibit
99.A and
is incorporated herein by this reference.
As
reported in our
annual report on Form 10-K for the year ending December 31, 2004, approximately
900 miles of the northern mainline of our pipeline system traverse lands held
in
trust by the United States for the Navajo Nation. Those lands are the subject
of
various right-of-way agreements into which the United States has entered with
us
with the consent of the Navajo Nation.
Today,
those real
property agreements expired despite intensive efforts by us for over a year
to
reach a renewed consent agreement with the Navajo Nation. The future terms
of
any ultimate consent to be obtained from the Navajo Nation are uncertain.
Under
the expiring
consent agreements with the Navajo Nation, we paid approximately $2 million
per
year to the Nation for a total payment of $29 million over the last 20 years.
We
have extended an offer that increases compensation to the Nation to
approximately $ 138 million in cash and restricted common stock plus non-cash
consideration, including a collaborative project to benefit the Nation, totaling
another $60 million, over the next 20 years.
The
Navajo Nation is
currently demanding we pay $22 million per year, or $440 million, over the
coming 20-year period. The Nation’s position amounts to a demand that we pay
$50,000 per acre for a 20-year right-of-way renewal, when the fair market value
for a perpetual right-of-way through privately-owned land in the same area
runs
from $100 to $500 per acre.
In
an effort to
resolve the current impasse in the negotiations, we
have also filed
an application with the Department of the Interior requesting the agency renew
our federal right-of-way without tribal consent. (You can access that filing
at
www.elpaso.com/about/Navajo).
Also,
because we are not the only pipeline facing this problem, the Energy Policy
Act
of 2005 includes a provision that calls for a comprehensive study of energy
infrastructure rights-of-way on tribal lands. The study is to be conducted
jointly by the Departments of Energy and the Interior and must be submitted
to
the Congress by August 2006.
We
do not expect any
interruption in service on our northern mainline system arising from these
circumstances.
Item
9.01 Financial Statements and Exhibits
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(c)
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Exhibits.
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Exhibit
Number
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Description
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99.A
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Press
Release
dated October 17, 2005.
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SIGNATURES
Pursuant
to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto
duly
authorized.
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EL
PASO NATURAL GAS COMPANY
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By:
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/s/
Daniel B. Martin
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Daniel
B. Martin
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Senior
Vice President
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Dated:
October 17, 2005
EXHIBIT
INDEX
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Exhibit
Number
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Description
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99.A
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Press
Release
dated October 17, 2005.
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