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Equitable Gobbles Up Carnegie Natural Gas

Equitable Gobbles Up Carnegie Natural Gas

Equitable Resources signed a definitive agreement to buy Carnegie Natural Gas Co., a gas utility and USX-Marathon Group subsidiary serving 9,000 residential, commercial and industrial customers in Pennsylvania and West Virginia, for an undisclosed sum last Tuesday. The purchase increased Equitable's natural gas throughput 27% and increased its production in Appalachia 9%. The companies hope to close the deal late this year or early next year.

"This is a good fit because we have contiguous markets," said Equitable spokesman Bob Butter. "We not only bought the distribution sector of this company, but we also got a hold of the production, interstate pipeline and marketing divisions as well." Equitable Resources' subsidiary, Equitable Gas Co., provides natural gas distribution services to over 260,000 residential, commercial and industrial customers located mainly in the city of Pittsburgh and surrounding municipalities in seven counties in southwestern Pennsylvania, plus a few municipalities in northern West Virginia.

Butter said Equitable has yet to decide what will happen to Carnegie's personnel. "Our interests are in building as strong a regional company as possible. There are some obvious synergies that will work well the way they are, and there is some overlap. As of right now, however, we're still trying to figure it all out."

For USX-Marathon, the move is another step in the company's plan to exit the gas utility business. "We've made it pretty evident that we want out of the gas utility side of things," said Bill Keslar, a USX-Marathon spokesman. "The Marathon division is still active in natural gas, but we've been trying to get out of the utility sector ever since we sold the Delhi Group to Koch in 1997." Keslar added that the Carnegie sale had been contemplated for quite some time. The utility was not put up for bid, but was sold in a negotiated deal with Equitable.

The transaction is subject to due diligence, customary closing conditions and regulatory approval.

John Norris

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