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Scana Pipeline Subsidiaries Complete Merger

More than two years after the plan was initially announced, Columbia, SC-based Scana Corp. reported Wednesday that its South Carolina Pipeline Corp. (SCPC) and SCG Pipeline Inc. (SCG) subsidiaries have finally consummated their merger and will begin operating under the new name of Carolina Gas Transmission Corp. (CGT). The single interstate natural gas transportation company will have 2,032 miles of pipeline and approximately 661,000 Dth/d of firm capacity.

First announced in June 2004 (see Daily GPI, June 28, 2004), the companies spent substantial time negotiating a settlement with customers, which resulted in the filing of a merger application and settlement with the Federal Energy Regulatory Commission (FERC) in February 2006 (see Daily GPI, Feb. 28). CGT now falls under the regulatory oversight of the Commission.

The plan was put into action following a regulatory change by FERC that would have required the two companies to change their organizational structures. The two companies have operated under one management team and would have had to split up into two management teams under new Commission rules.

Paul Fant, president and COO of the newly formed company, said the merger process took longer than anticipated, but the deliberate schedule was necessary to ensure a smooth transition for customers.

"Since our 2004 announcement we have worked closely with our customers to highlight the details of our plans while also helping them to prepare for the responsibilities that come with managing the purchase and transportation of their own gas supplies," he said. "The comfort level of our customers is now at a point where we're all ready to move the process forward.

"This merger gives large natural gas users the flexibility to manage their own purchasing strategies, which is something many of them have expressed an interest in through the years. As an interstate pipeline with access to major sources of supply, CGT is well positioned to meet the growing needs of our existing customers as well as expand to meet the needs of new markets."

Prior to the merger, SCPC provided a "bundled" natural gas procurement and delivery service to customers. It purchased gas at supply points in the Gulf of Mexico and contracted with interstate pipelines to have that gas transported into South Carolina, where it was then sold and delivered to customers through an intrastate pipeline network of approximately 1,450 miles. SCG Pipeline, which began operation in 2003, operates a 32-mile interstate pipeline that transports gas from the Elba Island liquefied natural gas import terminal near Savannah, GA to power plants in South Carolina.

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