Severance Agreement

Exhibit 10.1

December 19, 2008

Mr. Gregg S. Kantor

1709 SW Westwood Ct

Portland, OR 97201

Dear Gregg:

In connection with your promotion to the position of President and Chief Executive Officer of Northwest Natural Gas Company, an Oregon corporation (the "Company"), and to induce you to accept this position, the Company agrees to provide you certain severance benefits in the event your employment with the Company is terminated under the circumstances described below.

1. Cash Severance Benefit . Subject to Section 5, if the Company terminates your employment without Cause (as defined below) on or before December 31, 2013, the Company shall pay to you in a single payment an amount in cash equal to a percentage of your annual base salary in effect on the date of termination determined as follows: 100% of your salary if your date of termination is on or before December 31, 2009, 80% of your salary if your date of termination is on or before December 31, 2010, 60% of your salary if your date of termination is on or before December 31, 2011, 40% of your salary if your date of termination is on or before December 31, 2012, and 20% of your salary if your date of termination is on or before December 31, 2013.

2. ESRIP Benefit Enhancement . Under the terms of Section 2.02 of the Company’s Executive Supplemental Retirement Income Plan ("ESRIP"), you will become eligible for an early retirement benefit if you remain as a Company employee until your 55 ^th birthday on April 30, 2012, and you will generally receive a reduced benefit under Section 2.05 of the ESRIP if your employment terminates before then. Subject to Section 5, if the Company terminates your employment without Cause before April 30, 2012, you shall be treated as eligible for early retirement benefits under Section 2.02 of the ESRIP.

3. Cause . Termination by the Company of your employment for "Cause" shall mean termination upon (a) the willful and continued failure by you to perform substantially your assigned duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness) after a demand for substantial performance is delivered to you by the Chairman of the Board of the Company which specifically identifies the manner in which such executive believes that you have not substantially performed your duties or (b) the willful

engaging by you in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this paragraph (ii), no act, or failure to act, on your part shall be considered "willful" unless done, or omitted to be done, by you in knowing bad faith and without reasonable belief that your action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company.

4. Benefit Exclusions . No benefits shall be provided to you under this Agreement if (a) you terminate your employment with the Company whether or not you believe you have good reason for such termination, (b) your employment terminates as a result of your death or your Total and Permanent Disability (as defined in the ESRIP), or (c) you become entitled to the Change in Control Severance Benefit (as defined in the ESRIP).

5. Release and Payment . In consideration for and as a condition precedent to receiving the severance benefits outlined in this Agreement, you agree to execute a release of claims substantially in the form attached as Exhibit A (the "Release"). You agree to execute and deliver the Release to the Company within the later of (a) 21 days after the date you receive the Release or (b) the last day of your employment. Any payments required under this Agreement will be payable only after receipt by the Company of your signed Release and expiration of any required revocation period, and the Company shall not be obligated to make any payments if you do not deliver the signed Release within the time period specified in this Section 5.

6. Successors; Binding Agreement . This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate.

7. Notice . For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid and addressed to the address of the respective party set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the Chairman of the Board of the Company, with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

8. Miscellaneous . No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and the Chairman of the Board or President of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or of compliance with, any condition or

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provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Oregon.

9. Validity . The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

10. Arbitration . Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Portland, Oregon by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators’ award, which award shall be a final and binding determination of the dispute or controversy, in any court having jurisdiction.

11. Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument.

If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject.

Agreed to this 19th day

of December, 2008.

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EXHIBIT A

NORTHWEST NATURAL GAS COMPANY

RELEASE OF CLAIMS

Instructions to Employee : This document is important. Before signing it:

Take time to review it. You have 21 calendar days to consider this Release of Claims before signing it. You also have a period of up to seven (7) days after the date you sign this Release of Claims in which to revoke it in writing by delivering a written statement to Lea Anne Doolittle.

Dear Gregg:

As we have discussed, your employment with Northwest Natural Gas Company ("NW Natural" or the "Company") is ending effective                   , 2        ("Termination Date"). On behalf of NW Natural, I want to thank you for your service and express our best wishes to you in your future endeavors.

The Company and you are parties to a Severance Agreement dated December 19, 2008 (the "Severance Agreement") pursuant to which the Company has agreed to provide you certain severance compensation. Under the Severance Agreement, you will receive severance compensation to which you are not otherwise entitled. As a condition precedent to receiving this compensation, you are required to agree to the terms and conditions described in this Release of Claims (this "Release") which include a general release of legal claims you may have against the Company or its employees. If you choose not to execute this Release, you will not receive the severance compensation.

You have 21 calendar days to consider this Release before signing it. You also have a period of up to seven days after the date you sign this Release in which to revoke it in writing by delivering a written statement to Lea Anne Doolittle, Vice President of Human Resources, NW Natural, 220 NW Second Ave, Portland, OR 97209.

Regardless of whether you choose to execute this Release, you will timely receive upon termination (a) all wages owed to you, including accrued but unused VST pay; and (b) further correspondence regarding your rights to continue group health insurance as provided under applicable law.

Please carefully review and consider the terms of this Release as set forth below.

A-1

1. Separation of Employmen t. Your employment with the Company is ending effective                   , 2        , the Termination Date defined herein, whether or not you choose to sign this Release. Until that date, you will be on a paid leave of absence. As described in more detail in Paragraph 16 below, you have until                   , 2        to consider this Release and, if you choose to enter into this Release, you