News Release
November 14, 2002

PACIFIC NORTHERN GAS REPORTS THIRD QUARTER EARNINGS

VANCOUVER, BRITISH COLUMBIA - Pacific Northern Gas Ltd. (PNG) announced today that net income for the first nine months of 2002 was $3.3 million, compared with $4.1 million for the corresponding period in 2001. After providing for preferred share dividends, net income per common share in the first nine months of 2002 was $0.86 compared with $1.08 for the first nine months of 2001.

For the quarter ended September 30, 2002, a loss of $0.9 million was incurred, compared with net income of $0.2 million for the quarter ended September 30, 2001. After providing for preferred share dividends, the loss per common share in the quarter ended September 30, 2002 was $0.28 compared with net income per common share of $0.02 in the corresponding period in 2001.

The decrease in net income for both the third quarter and the nine months ended September 30, 2002 is primarily due to adjustments totaling $0.8 million recorded as a result of two decisions issued by the British Columbia Utilities Commission, dated July 31, 2002, relating to the Company's 2002 revenue requirements applications. As a result of the decisions, permanent rates were set below the interim rates established at the beginning of the year. The adjustments to income relate to these reductions in customer rates, as well as the disallowance of other elements of the cost of service.

Operating revenues in the first nine months of 2002 decreased to $76.2 million as compared with $107.6 million in the first nine months of 2001. The decrease in operating revenues is largely due to the decrease in the commodity cost of natural gas that is passed through to customers without markup, as well as a $12 million reduction in sales of gas surplus to the needs of the Company's sales customers (off-system sales) in the first nine months of 2002, compared with the corresponding period in 2001.

Operating margin in the first nine months of 2002 decreased to $38.7 million, as compared with $40.2 million in the first nine months of 2001. The decrease in operating margin is due to actual deliveries to residential and commercial customers being lower than the delivery forecasts used to set customer rates.

The Board of Directors did not declare a quarterly dividend on its Class A and Class B Common Shares for the fourth quarter of 2002.

The Board of Directors declared a semi-annual dividend of 84.375 cents per share on the Company's 6-3/4 percent cumulative, redeemable preferred shares, payable January 1, 2003 to shareholders of record at the close of business on December 10, 2002.

Headquartered in Vancouver, British Columbia, Pacific Northern Gas Ltd. (TSE:PNG.A/ PNG.PR.A) owns and operates natural gas transmission and distribution systems. The Company's western transmission line extends from the Duke Energy Gas Transmission (formerly Westcoast Energy) system north of Prince George to tidewater at Kitimat and Prince Rupert, and provides service to 12 communities and a number of industrial facilities. In the northeast, Pacific Northern's subsidiary Pacific Northern Gas (N.E.) Ltd. provides gas distribution service in the Dawson Creek, Fort St. John and Tumbler Ridge areas. Further information is available on the Company's Web site at: www.pacificnortherngas.com.

Third Quarter Results    
9 Month Period Ended September 30    
($ thousand, except for per share data)
2002 
2001 
Consolidated revenue
$76,174 
$107,641 
Cost of sales
37,515 
67,442 
Operating margin
38,659 
40,199 
 
 
 
Net income applicable to common shares
$3,067 
$3,832 
Earnings per common share basic
$0.86 
$1.08 
Earnings per common share diluted
$0.85 
$1.06 
Operating cash flow
$10,537 
$11,647 
     
Third Quarter Results    
3 Month Period Ended September 30    
($ thousand, except for per share data)
2002 
2001 
Consolidated revenue
$16,714 
$23,416 
Cost of sales
7,296 
9,578 
Operating margin
9,418 
13,838 
 
 
 
Net income (loss) applicable to common shares
($974)
$75 
Earnings per common share basic
($0.28)
$0.02 
Earnings per common share diluted
($0.27)
$0.02 
Operating cash flow
$1,414 
$3,071 

Contact: Elizabeth A. Fletecher, CA
  Treasurer and Comptroller
  (604) 691-5684