In a move that brings together two of the energy industry’s800-pound gorillas, Texaco and Enron North America announced lastweek they are combining their Louisiana pipeline and storage assetsin a new joint venture called Bridgeline Holdings LP.

The venture will have a staff of about 85 employees who willoperate the Bridgeline and Louisiana Resources intrastate pipelines(including the Henry Hub), the Napoleonville and Sorrento salt domestorage facilities and a marketing division with about 1 Bcf/d ofgas sales. It will begin operations March 1.

“The formation of this joint venture reflects a continuation ofTexaco’s long-term commitment to the industrial and utility marketsof south Louisiana,” said Terry F. Hudgens, president of TexacoNatural Gas Inc. “As the leading marketer of natural gas andnatural gas services in this area, Texaco is excited aboutcombining the strengths of Bridgeline and Louisiana ResourcesCompany to enhance the products and services we offer to customersin this increasingly competitive market.”

Cliff Baxter, chairman and CEO of Enron North America, said thenew company would have greater overall system flexibility that willimprove operating efficiencies. “By combining Enron’s trading, riskmanagement and financial expertise with Texaco’s marketingfranchise, we will be able to expand our strategic position andoptimize the gas supply for customers,” he said.

Bridgeline Holdings, to be headquartered in Houston, will havecombined facilities consisting of more than 1,000 miles oftransmission and distribution pipeline, 7 Bcf of salt dome storagecapacity, with an additional 6 Bcf in development, and 33,050horsepower of compression. The combined system will have adiversified gas supply, high and low pressure operatingcapabilities and access to the interstate pipeline grid in southLouisiana and the Henry Hub.

“When you combine the two systems’ footprint, the number ofreceipt points that we have now versus what we had independently[provides] a lot more system flexibility and capability,” saidRandy Curry, president of the new joint venture and a former seniorvice president for Texaco Natural Gas in the pipeline and plantsdivision. Combined the company will have connections with 65pipelines and 76 major industrial plants.

“It’s supply interconnectivity. We have a much broader supplybase that we access now. We have a lot more system flexibilitybecause the LRC pipeline system was operated as a high-pressuresystem – it could physically redeliver back into the interstategrid at all of the points of interconnection. Bridgeline’s systemoperated more as a lower pressure gas distribution system,receiving gas from the interstate grid but not able to physicallyredeliver gas back off its system – the only way it couldaccomplish that was by displacement.”

The companies’ two salt cavern storage facilities, Texaco’s 3.6Bcf Sorrento facility and Enron’s 4.2 Bcf Napoleonville field,currently are being expanded to provide greater deliverability andstorage capacity. Napoleonville will be a 7 Bcf working gas cavernwhen the expansion is complete with 600 MMcf/d of deliverability,while Sorrento will be a 6 Bcf working gas cavern with 600 MMcf/dof deliverability. Combined the company will operate 13 Bcf ofworking storage capacity and 1,200 MMcf/d of deliverability.

“The business strategy really doesn’t change at all with respectto this marketplace,” said Curry. “Both companies before had beenfocused on selling in the industrial corridor. That’s what thisreally is designed to do. This just puts a business combination outthere that just has a lot more capability to serve that corridor.It’s a heavily industrialized area… It’s a very competitivemarket, one in which most industrial sites along the corridor therehave multiple connections to other pipelines.”

Rocco Canonica

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.