Texaco, Enron Join Forces in Louisiana
In a move that brings together two of the energy industry's
800-pound gorillas, Texaco and Enron North America announced last
week they are combining their Louisiana pipeline and storage assets
in a new joint venture called Bridgeline Holdings LP.
The venture will have a staff of about 85 employees who will
operate the Bridgeline and Louisiana Resources intrastate pipelines
(including the Henry Hub), the Napoleonville and Sorrento salt dome
storage facilities and a marketing division with about 1 Bcf/d of
gas sales. It will begin operations March 1.
"The formation of this joint venture reflects a continuation of
Texaco's long-term commitment to the industrial and utility markets
of south Louisiana," said Terry F. Hudgens, president of Texaco
Natural Gas Inc. "As the leading marketer of natural gas and
natural gas services in this area, Texaco is excited about
combining the strengths of Bridgeline and Louisiana Resources
Company to enhance the products and services we offer to customers
in this increasingly competitive market."
Cliff Baxter, chairman and CEO of Enron North America, said the
new company would have greater overall system flexibility that will
improve operating efficiencies. "By combining Enron's trading, risk
management and financial expertise with Texaco's marketing
franchise, we will be able to expand our strategic position and
optimize the gas supply for customers," he said.
Bridgeline Holdings, to be headquartered in Houston, will have
combined facilities consisting of more than 1,000 miles of
transmission and distribution pipeline, 7 Bcf of salt dome storage
capacity, with an additional 6 Bcf in development, and 33,050
horsepower of compression. The combined system will have a
diversified gas supply, high and low pressure operating
capabilities and access to the interstate pipeline grid in south
Louisiana and the Henry Hub.
"When you combine the two systems' footprint, the number of
receipt points that we have now versus what we had independently
[provides] a lot more system flexibility and capability," said
Randy Curry, president of the new joint venture and a former senior
vice president for Texaco Natural Gas in the pipeline and plants
division. Combined the company will have connections with 65
pipelines and 76 major industrial plants.
"It's supply interconnectivity. We have a much broader supply
base that we access now. We have a lot more system flexibility
because the LRC pipeline system was operated as a high-pressure
system - it could physically redeliver back into the interstate
grid at all of the points of interconnection. Bridgeline's system
operated more as a lower pressure gas distribution system,
receiving gas from the interstate grid but not able to physically
redeliver gas back off its system - the only way it could
accomplish that was by displacement."
The companies' two salt cavern storage facilities, Texaco's 3.6
Bcf Sorrento facility and Enron's 4.2 Bcf Napoleonville field,
currently are being expanded to provide greater deliverability and
storage capacity. Napoleonville will be a 7 Bcf working gas cavern
when the expansion is complete with 600 MMcf/d of deliverability,
while Sorrento will be a 6 Bcf working gas cavern with 600 MMcf/d
of deliverability. Combined the company will operate 13 Bcf of
working storage capacity and 1,200 MMcf/d of deliverability.
"The business strategy really doesn't change at all with respect
to this marketplace," said Curry. "Both companies before had been
focused on selling in the industrial corridor. That's what this
really is designed to do. This just puts a business combination out
there that just has a lot more capability to serve that corridor.
It's a heavily industrialized area... It's a very competitive
market, one in which most industrial sites along the corridor there
have multiple connections to other pipelines."