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FTC Clears El Paso-Sonat Deal

FTC Clears El Paso-Sonat Deal

By the time you read this, El Paso Energy will be putting the finishing touches on its merger with Sonat Inc., creating the largest natural gas pipeline in North America in terms of miles and throughput.

Late Friday, the Federal Trade Commission (FTC) cleared the merger of the two companies, which was the last stumbling block to the transaction, when it signed a consent agreement that orders the merged company to divest Sea Robin Pipeline Co., East Tennessee Natural Gas Co. and its ownership interest in Destin Pipeline Co. L.L.C.

"We're hoping to close the deal Monday [today], and then integrate the two companies immediately thereafter," said Norma Dunn, El Paso senior vice president over public relations. "We're pretty excited.....we've been waiting for this for sometime," she told NGI. El Paso Energy first announced its intent to acquire Sonat last March.

El Paso spokeswoman Paula Delaney said there were no surprises for the company in the FTC consent agreement. "It was exactly what we had agreed on previously." A summary of the consent agreement will be published in the Federal Register, and will be subject to a 30-day comment period.

As for the companies to be sold, Dunn said "we are in discussions with a number of companies, the identities of which can't be disclosed. We certainly are seeing a lot of interest." The consent order requires the merged company to divest itself of these assets within six months or a trustee will be appointed to carry out the sales. The order also requires the El Paso-controlled Viosca Knoll Gathering Co. to provide open access, and to allow other pipelines to interconnect with it. Viosca operates off the coast of eastern Louisiana.

Susan Parker

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