FORM OF LONG TERM INCENTIVE AWARD AGREEMENT

Exhibit 10.1

FORM OF LONG TERM INCENTIVE AWARD AGREEMENT

This Agreement is entered into as of                     , between Northwest Natural Gas Company, an Oregon corporation (the “Company”), and                      (“Recipient”).

On                     , the Organization and Executive Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) authorized an objectively-determinable performance-based award (the “TSR Award”) to Recipient pursuant to Section 8 of the Company’s Long Term Incentive Plan (the “Plan”) and a subjective performance-based award (the “Strategic Award”) to Recipient pursuant to Section 6 of the Plan. Compensation paid pursuant to the TSR Award is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986 (the “Code”), while compensation paid pursuant to the Strategic Award will not so qualify. Recipient desires to accept the awards subject to the terms and conditions of this Agreement.

NOW, THEREFORE, the parties agree as follows:

1. Awards . Recipient’s “Target Share Amount” for purposes of this Agreement is              shares.

1.1 TSR Award . Subject to the terms and conditions of this Agreement, the Company shall issue or otherwise deliver to the Recipient the number of shares of Common Stock of the Company (the “TSR Performance Shares”) determined under this Agreement based on (a) the performance of the Company’s Common Stock relative to a peer group of companies during the three-year period from                      to                      (the “Award Period”) as described in Section 2 and (b) Recipient’s continued employment during the Award Period as described in Section 4. If the Company issues or otherwise delivers TSR Performance Shares to Recipient, the Company shall also pay to Recipient the amount of cash determined under Section 5 (the “TSR Dividend Equivalent Cash Award”). Recipient’s “TSR Target Share Amount” for purposes of this Agreement is 75% of the Target Share Amount.

1.2 Strategic Award . Subject to the terms and conditions of this Agreement, the Company shall issue or otherwise deliver to the Recipient the number of shares of Common Stock of the Company (the “Strategic Performance Shares” and, together with the TSR Performance Shares, the “Performance Shares”) determined under this Agreement based on (a) the Company’s performance against milestones during the Award Period as determined by the Committee under Section 3 and (b) Recipient’s continued employment during the Award Period as described in Section 4. If the Company issues or otherwise delivers Strategic Performance Shares to Recipient, the Company shall also pay to Recipient the amount of cash determined under Section 5 (the “Strategic Dividend Equivalent Cash Award” and, together with the TSR Dividend Equivalent Cash Award, the “Dividend Equivalent Cash Awards”). Recipient’s “Strategic Target Share Amount” for purposes of this Agreement is 25% of the Target Share Amount.

2. TSR Performance Condition .

2.1 Subject to possible reduction under Section 4, the number of TSR Performance Shares to be issued or otherwise delivered to Recipient shall be determined by multiplying the TSR Payout Factor (as defined below) by the TSR Target Share Amount; provided, however, that no TSR Performance Shares shall be issued or otherwise delivered unless the Company’s TSR (as defined below) for the Award Period is at least         %.

2.2 To determine the “TSR Payout Factor,” the ten Peer Group Companies (as defined below) shall be ranked based on their respective TSR’s from highest to lowest, with the Peer Group Company with the highest TSR having a TSR Ranking of “1” and the Peer Group Company with the lowest TSR having a TSR Ranking of “10.” If the Company’s TSR is equal to the TSR of any other Peer Group Company, the TSR Payout Factor will be the percentage in the following table corresponding to the TSR Ranking of that Peer Group Company.

If the Company’s TSR is higher than the TSRs of all Peer Group Companies, the TSR Payout Factor will be 200%. If the Company’s TSR is not at least as high as the TSR of the Peer Group Company with the TSR Ranking of “8,” the TSR Payout Factor will be 0%. If the Company’s TSR is between the TSRs of any two Peer Group Companies with TSR Rankings between “1” and “8,” the TSR Payout Factor shall be interpolated as follows. The excess of the Company’s TSR over the TSR of the lower Peer Group Company shall be divided by the excess of the TSR of the higher Peer Group Company over the TSR of the lower Peer Group Company. The resulting fraction shall be multiplied by the difference between the percentages in the above table corresponding to the TSR Rankings of the two Peer Group Companies. The product of that calculation shall be added to the percentage in the above table corresponding to the TSR Ranking of the lower Peer Group Company, and the resulting sum shall be the TSR Payout Factor.

2.3 The “Peer Group Companies” are AGL Resources Inc., Atmos Energy Corporation, The Laclede Group, Inc., New Jersey Resources Corporation, NICOR Inc., Piedmont Natural Gas Company, Inc., South Jersey Industries, Inc., Southwest Gas Corporation, Vectren Corporation and W G L Holdings, Inc. If prior to the end of the Award Period, the common stock of any Peer Group Company ceases to be publicly traded for any reason, then such company shall no longer be considered a Peer Group Company, and an alternate peer company shall become a Peer Group Company effective as of the start of the Award Period. The

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alternate peer companies, and the order in which they will be added as Peer Group Companies, if necessary, are: first, EnergySouth, Inc.; second, SEMCO Energy, Inc.; third, Chesapeake Utilities Corporation; and fourth, National Fuel Gas Company. If prior to the end of the Award Period, all of the above alternate peer companies have become Peer Group Companies and the common stock of yet another Peer Group Company ceases to be publicly traded for any reason so that there are only nine remaining Peer Group Companies, for purposes of Section 2.2 it shall be assumed that there is a hypothetical Peer Group Company with a TSR Ranking of “5”; provided, however, that if the Company’s TSR is between the TSRs of the Peer Group Companies with TSR Rankings of “4” and “6,” the TSR Payout Factor shall be interpolated between the payout percentages corresponding to the TSR Rankings of those two companies. If yet another Peer Group Company ceases to be publicly traded for any reason so that there are only eight remaining Peer Group Companies, for purposes of Section 2.2 it shall be assumed that there are two hypothetical Peer Group Company with TSR Rankings of “5” and “6” and, if necessary, the TSR Payout Factor shall interpolated between the payout percentages corresponding to the Peer Group Companies with TSR Rankings of “4” and “7”. Similarly, if additional Peer Group Companies cease to be publicly traded for any reason, additional hypothetical Peer Group Companies shall be assumed to exist with TSR Rankings of “4”, then “7”, then “3”, then “9”, and then “2”.

2.4 The “TSR” for the Company and each Peer Group Company shall be calculated by (a) assuming that $100 is invested in the common stock of the company at a price equal to the average of the closing market prices of the stock for the period from October 1, 2006 to December 31, 2006, (b) assuming that for each dividend paid on the stock during the Award Period, the amount equal to the dividend paid on the assumed number of shares held is reinvested in additional shares at a price equal to the closing market price of the stock on the ex-dividend date for the dividend, and (c) determining the final dollar value of the total assumed number of shares based on the average of the closing market prices of the stock for the period from October 1, 2009 to December 31, 2009. The “TSR” shall then equal the amount determined by subtracting $100 from the foregoing final dollar value, dividing the result by 100 and expressing the resulting fraction as a percentage.

2.5. Strategic Performance Condition . Subject to possible reduction under Section 4, the number of Strategic Performance Shares to be issued or otherwise delivered to Recipient shall be determined by multiplying the Strategic Payout Factor by the Strategic Target Share Amount. The “Strategic Payout Factor” shall be a percentage between 0% and 200% determined by the Committee after the Award Period based on the Committee’s assessment of the extent to which the Company has