NORTHWEST NATURAL GAS CO
EX. 10I - NON-EMPLOYEE DIRECTORS STOCK COMP. PLAN
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<FILENAME>ex10i.txt
<DESCRIPTION>EX. 10I - NON-EMPLOYEE DIRECTORS STOCK COMP. PLAN
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                                                                  EXHIBIT (10i.)


                          NORTHWEST NATURAL GAS COMPANY
                 NON-EMPLOYEE DIRECTORS STOCK COMPENSATION PLAN

                                 January 1, 1989


Northwest Natural Gas Company
  an Oregon corporation
220 NW Second Avenue
Portland, OR  97209                                                  the Company


     The Company believes it desirable that members of its board of directors,
who represent the Company's shareholders, be themselves shareholders. To
supplement the efforts of the directors towards this end, the Company wishes to
increase the ownership interest of non-employee directors through awards of
Company Common Stock. The Company, however, recognizes that a director may
believe that he or she has a sufficient ownership interest in Company Common
Stock, and therefore permits directors to receive awards under the plan in the
form of deferred cash rather than stock.

     The following plan is therefore adopted:

     1.  Administration.
         --------------

     Unless otherwise determined pursuant to this section, this plan shall be
administered by the corporate secretary of the Company (the Administrator), who
may delegate all or part of that authority and responsibility. The Administrator
shall interpret the plan, arrange for the purchase and delivery of shares,
determine forfeitures, and otherwise assume general responsibility for
administration of the plan. Any decision by the Administrator shall be final and
bind all parties. The Administrator may be replaced from time to time in the
discretion of the chief executive officer of the Company.

     2.  Awards.
         ------

         2.1  Each non-employee director of the Company, including those
directors who have been employees of the Company in the past but are not
employees at the time of any award under this plan, shall receive awards under
this plan as of the following award dates:

              (a)  January 1, 1989; or

              (b)  In the case of (i) directors elected after January 1, 1989
and (ii) persons who become non-employee directors after January 1, 1989 by
ceasing to be employees of the Company, the date on which such director is first
elected, whether by the shareholders or board of directors of the Company, or
ceases to be an employee of the Company, as the case may be; and


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              (c)  On January 1 of each year thereafter, commencing with January
1, 1998.

         2.2  As of each award date, a participant shall receive an award
calculated in the following manner. The "Number of Award Months" shall be
determined by subtracting the number of full or partial calendar months
remaining until all, if any, previous awards to the participant under this plan
will be vested from the number of full or partial calendar months remaining
until the fifth year end after the award date; provided, however, that if,
assuming the participant were reelected, a participant's term as a director
would end because of age before the fifth year end after the award date, the
"Number of Award Months" shall be determined by subtracting the number of full
or partial calendar months remaining until all, if any, previous awards to the
participant under this plan will be vested from the number of full or partial
calendar months remaining until the participant's term will end because of age.
The amount awarded shall then be calculated by multiplying the Number of Award
Months by an amount that, effective as of October 1, 2002, shall be $1,666.67.
For purposes of this plan, "full or partial calendar months remaining" for any
period includes the calendar month in which the award date falls and the
calendar month in which the last day of the period falls and all calendar months
in between.

         2.3  As of each award date, the dollar amount calculated under 2.2
shall be awarded to the participant as follows:

              (a)  With respect to award dates after February 26, 2004, each
participant may elect at any time prior to an award date to receive the entire
amount to be awarded on that date in deferred cash rather than in Company Common
Stock. No partial elections shall be permitted. Any such election must be in
writing delivered to the Administrator prior to the award date. If such an
election is made, the dollar amount calculated under 2.2 shall be credited to
the participant's Cash Account under the Company's Directors Deferred
Compensation Plan (the "DDCP") effective as of the award date. The deferred cash
amounts shall be subject to vesting under 3, but any interest credited with
respect to these amounts under the DDCP shall be fully vested and nonforfeitable
at all times. The deferred cash amounts shall otherwise be subject to all of the
terms and conditions of the DDCP.

              (b)  If a participant does not timely elect to receive an award in
deferred cash, the dollar amount calculated under 2.2 shall be awarded to the
participant in Common Stock as follows:

                   (i) As soon as practicable after the award date, the
Administrator shall deliver cash in the amount of the award and applicable
commissions to one or more brokers or other persons with instructions to
purchase Company Common Stock in the open market. It is understood that market
conditions or regulations affecting the purchases by a corporation of its own
shares may extend the period of purchase over several days or weeks.

                   (ii) When several participants have the same award date, all
of the stock shall be purchased and then divided among the participants in
proportion to their respective awards, regardless of any changes in price that
occur while purchases are being carried out.


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                   (iii) When all of the stock has been purchased with respect
to any award date, certificates in the names of the participants for their
respective shares shall be delivered to the Administrator. Each participant
shall deliver to the Administrator a blank stock power duly executed in a form
satisfactory to the Administrator for each certificate for shares issued in the
participant's name.

                   (iv) The Administrator shall hold the certificates and stock
powers until the shares are vested and released as provided in 3.4.

         2.4  Upon any amendment of this plan to increase the dollar amount of
awards set forth in 2.2, each participant shall receive an additional award in
accordance with the procedures set forth in 2.3. The amount of the additional
award for each participant shall be determined by multiplying the amount of the
increase in the award amount by the number of full or partial calendar months
remaining until the participant's most recent prior award under this plan will
be fully vested. The resulting dollar amount shall then be either used to
purchase Common Stock for the participant or credited under the DDCP as set
forth in 2.3.

     3.  Vesting; Delivery of Shares; Forfeitures.
         ----------------------------------------

         3.1  For each award under 2.2 and 2.3, the number of awarded shares or
the amount of awarded cash, as applicable, that will vest per month shall be
determined by dividing the number of awarded shares or the amount of awarded
cash by the Number of Award Months. This monthly amount shall vest as of the
first day of each calendar month commencing with the later of the month in which
the award is made or the first month after all previous awards to the
participant under this plan shall have vested. If an award is made other than on
the first day of a month, the award date shall be considered the first day of
that month for purposes of 3.1 and 3.2.

         3.2  For each award under 2.3 and 2.4, the number of awarded shares or
the amount of awarded cash, as applicable, that will vest per month shall be
determined by dividing the number of awarded shares or the amount of awarded
cash by the number of full or partial calendar months remaining until the
participant's most recent prior award under 2.2 and 2.3 will be fully vested.
This monthly amount shall vest as of the first day of each calendar month
commencing with the month in which the award is made.

         3.3  Notwithstanding 3.1 and 3.2, all awarded shares and awarded cash
shall vest upon a change in control of the Company. For purposes of this plan, a
"change in control" of the Company shall mean the occurrence of any of the
following events:

              (a)  The approval by the shareholders of the Company of:

                   (1) any consolidation, merger or plan of share exchange
     involving the Company (a "Merger") as a result of which the holders of
     outstanding securities of the Company ordinarily having the right to vote
     for the election of directors ("Voting Securities") immediately prior to
     the Merger do not continue to hold at least 50% of the combined voting
     power of the outstanding Voting Securities of the surviving corporation or
     a parent corporation of the surviving corporation immediately after the


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     Merger, disregarding any Voting Securities issued to or retained by such
     holders in respect of securities of any other party to the Merger;

                   (2) any sale, lease, exchange or other transfer (in one
     transaction or a series of related transactions) of all, or substantially
     all, the assets of the Company; or

                   (3) the adoption of any plan or proposal for the liquidation
     or dissolution of the Company;

              (b)  At any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the board of
directors of the Company ("Incumbent Directors") shall cease for any reason to
constitute at least a majority thereof; provided, however, that the term
"Incumbent Director" shall also include each new director elected during such
two-year period whose nomination or election was approved by two-thirds of the
Incumbent Directors then in office; or

              (c)  Any person (as such term is used in Section 14(d) of the
Securities Exchange Act of 1934, other than the Company or any employee benefit
plan sponsored by the Company) shall, as a result of a tender or exchange offer,
open market purchases or privately negotiated purchases from anyone other than
the Company, have become the beneficial owner (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934), directly or indirectly, of Voting
Securities representing twenty percent (20%) or more of the combined voting
power of the then outstanding Voting Securities.

         3.4  The certificate and stock power for vested shares shall be
delivered to the participant or in accordance with 5.2 as soon as practicable
after the participant ceases to be a director of the Company or, if earlier, as
soon as practicable after a change in control of the Company. Payment of vested
deferred cash shall be governed by the terms of the DDCP.

         3.5  If a participant ceases to be a director (other than pursuant to a
simultaneous change in control of the Company), awarded shares and awarded cash
remaining unvested shall be forfeited. The Administrator, acting for the
participant pursuant to the executed stock power, shall transfer the unvested
shares to the Company, and these shares shall be cancelled. The participant or
the participant's representative shall execute any documents reasonably
requested by the Administrator to facilitate the transfer. The participant's
Cash Account under the DDCP shall be reduced by the amount of unvested cash that
is forfeited.

     4.  Status Before Full Vesting; Transfer of Shares.
         ----------------------------------------------

         4.1  Each participant shall be a shareholder of record with respect to
all shares awarded, whether or not vested, and shall be entitled to all of the
rights of such a holder, except that a participant's share certificates shall be
held by the Administrator until delivered in accordance with 3.4.

         4.2  Any dividends or communications to shareholders received by the
Administrator with respect to shares held by the Administrator shall promptly be
transmitted to the participant.


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         4.3  No participant may transfer any interest in unvested shares to any
person other than the Company.

         4.4  No participant may transfer any interest in any shares awarded
under this plan, whether vested or not, until he or she ceases to be a director
of the Company.

         4.5  Notwithstanding 2.3(b)(iv), 3.4, 4.1, 4.3 and 4.4, if a
participant in the DDCP elects under the DDCP to defer shares of Company Common
Stock awarded to the participant under this plan, promptly after the deferral
election becomes irrevocable the Administrator shall cause the Common Stock
subject to such irrevocable deferral to be transferred to the trustee of the
Northwest Natural Gas Company Umbrella Trust(TM) For Directors. The Common Stock
so transferred shall nevertheless remain subject to forfeiture under 3.5 if the
participant ceases to be a director prior to vesting of the shares.

     5.  Death of a Participant.
         ----------------------

         5.1  Any vested shares held by the Administrator for a participant who
has died shall be delivered as soon as practicable to the participant's death
beneficiary under 5.2.

         5.2  Any vested shares to be delivered on death of a participant under
5.1 shall go to a participant's beneficiary in the following order of priority:

              (a)  To the surviving beneficiary designated by the participant in
writing to the Administrator;

              (b)  To the participant's surviving spouse; or

              (c)  To the participant's estate.

     6.  Amendment or Termination; Miscellaneous.
         ---------------------------------------

         6.1  The board of directors of the Company may amend or terminate this
plan at any time. No amendment or termination shall adversely affect any
outstanding award.

         6.2  Subject to the rights of amendment and termination in 6.1, this
plan shall continue indefinitely and future awards will be made in accordance
with 2.1.

         6.3  Nothing in this plan shall create any obligation on the part of
the board of directors of the Company to nominate any director for reelection by
the shareholders or the board of directors.


     Adopted by the board of directors of Northwest Natural Gas Company on
November 17, 1988, effective January 1, 1989. Amended by the board of directors
of Northwest Natural Gas Company on May 23, 1991, effective July 1, 1991.
Amended by the board of directors of Northwest Natural Gas Company on July 24,
1997, effective July 1, 1997. Amended by the board of directors of Northwest
Natural Gas Company on December 18, 1997, effective January 1, 1998. Amended by


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the board of directors of Northwest Natural Gas Company on September 26, 2002,
effective October 1, 2002. Amended by the board of directors of Northwest
Natural Gas Company on February 26, 2004, effective February 26, 2004.


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