PG&E GT-T Reorganizes Business Operations
PG&E Gas Transmission-Texas has announced a reorganization of
its business into four major lines: field services, transmission
and storage services, gas marketing and supply, and natural gas
liquids (NGL) marketing and development.
"The big reason we're doing this is to make money," said Lynn
Bourdon, senior vice president of commercial operations for PG&E
GT-Texas. "We're trying to improve our performance. We're also
trying to respond to things like the Texas Railroad Commission code
of conduct and to ensure that our organization and our posture and
our performance in the marketplace satisfies the criteria as set
forth in the code. It makes us more customer-focused and helps us
improve products and services."
The code, which was introduced last year, requires that
transmission, storage and gathering companies treat similarly
situated companies similarly and do not give favored treatment to
their affiliates. As part of its effort to meet those requirements,
PG&E GT-Texas is putting all of its marketing division in
Houston and all of its transmission and storage operations in San
The restructuring is designed to create a "better level of
service" in each one of the business segments, said Bourdon, but
it's also expected to improve efficiency.
A year ago, PG&E bought Valero Natural Gas, Teco Pipeline and
Energy Source. Since that time the company has attempted to combine
all those assets and structure them into efficient operations.
However, the liquids and gas markets have been somewhat
Low basis differentials in the gas market between Waha in West
Texas and Katy and the Houston Ship Channel in East Texas, along
with poor liquids prices related to the fall in crude markets
combined to hinder profitability. At one point upper management at
PG&E Corp. even suggested selling off some of its new Texas
assets, but legal and tax considerations as well as a declining
market for midstream assets helped change that plan.
"This [reorganization] is not a precursor to getting rid of any
of our assets. We have gained the confidence of our board in the
position these gas assets have for our national energy policy,"
Bourdon said, adding the reorganization instead may set the company
in line to make some acquisitions and further build on its Texas
assets. He said the liquids market is expected to improve gradually
through the rest of 1998.
PG&E GT-T has gas throughput of more than 3.5 Bcf/d in a
pipeline network of more than 8,000 miles. It also has a natural
gas liquids production capacity in excess of 100,000 b/d from nine
plants and a 500-mile NGL pipeline network.
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