Equitable Resources signed a definitive agreement to buyCarnegie Natural Gas Co., a gas utility and USX-Marathon Groupsubsidiary serving 9,000 residential, commercial and industrialcustomers in Pennsylvania and West Virginia, for an undisclosed sumlast Tuesday. The purchase increased Equitable’s natural gasthroughput 27% and increased its production in Appalachia 9%. Thecompanies hope to close the deal late this year or early next year.

“This is a good fit because we have contiguous markets,” saidEquitable spokesman Bob Butter. “We not only bought thedistribution sector of this company, but we also got a hold of theproduction, interstate pipeline and marketing divisions as well.”Equitable Resources’ subsidiary, Equitable Gas Co., providesnatural gas distribution services to over 260,000 residential,commercial and industrial customers located mainly in the city ofPittsburgh and surrounding municipalities in seven counties insouthwestern Pennsylvania, plus a few municipalities in northernWest Virginia.

Butter said Equitable has yet to decide what will happen toCarnegie’s personnel. “Our interests are in building as strong aregional company as possible. There are some obvious synergies thatwill work well the way they are, and there is some overlap. As ofright now, however, we’re still trying to figure it all out.”

For USX-Marathon, the move is another step in the company’s planto exit the gas utility business. “We’ve made it pretty evidentthat we want out of the gas utility side of things,” said BillKeslar, a USX-Marathon spokesman. “The Marathon division is stillactive in natural gas, but we’ve been trying to get out of theutility sector ever since we sold the Delhi Group to Koch in 1997.”Keslar added that the Carnegie sale had been contemplated for quitesome time. The utility was not put up for bid, but was sold in anegotiated deal with Equitable.

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

John Norris

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