Making for a busy week for the Charlotte, NC-based company, Duke Energy announced that it has put its Patriot pipeline project into service, implemented a reorganization of the company’s finance and risk management functions and entered into an agreement to sell its Energy Delivery Services business unit, and that was all on Friday.
Duke Energy said the Patriot Project will initially transport 365,000 Dth/d of natural gas to customers in the southeastern United States (see Daily GPI, Nov. 17). Patriot expands Duke Energy’s existing East Tennessee Natural Gas (ETNG) pipeline system in Tennessee and Virginia, and extends the system into southwest Virginia and northern North Carolina through a new 95-mile pipeline, which brings natural gas to some parts of Virginia for the first time.
“The Patriot Project adds critical energy infrastructure to a constrained market in time for the 2003-2004 winter heating season,” said Tom O’Connor, president of Duke Energy Gas Transmission, the Duke Energy business unit that developed the project. “With the construction of the initial facilities completed, the Patriot Project can easily be expanded with little additional environmental impact to serve future market growth expected in the Southeast.
“Patriot provides additional market access for regional supplies sourced from the Appalachian basin and our joint Saltville (Virginia) Storage Project with NUI,” O’Connor added. “This added infrastructure not only enhances existing ETNG customers’ reliability and flexibility but also provides much-needed supply diversity and peaking services to potential new customers in the Southeast and eastern Mid-Atlantic states.”
As part of the company’s reorganization of its finance and risk management functions, new Duke Energy CEO Paul Anderson said that Robert Brace, the company’s chief financial officer since 2001, has resigned and will be leaving the company. Anderson appointed David Hauser — formerly senior vice president and treasurer — to the positions of senior vice president and CFO, in an acting capacity, effective Friday. Anderson added that the company is launching an active search for a CFO, and Hauser will be a candidate.
Hauser’s interim responsibilities will include certifying financial statements and performing the finance functions of treasury, tax, accounting and financial planning. In addition, the company’s risk management organization, which currently reports to Richard Osborne, executive vice president, will begin reporting to the CFO. Osborne will continue in his post with responsibility for Crescent Resources, internal audit, insurance, crisis and business continuity planning.
Paul Barry, vice president of merger and acquisitions, and his group will move from the CFO organization to report to Richard Blackburn, executive vice president, general counsel and chief administrative officer. The change is designed to more closely align the M&A group with the strategy and planning function, which reports to Blackburn. Greg Ebel, vice president of investor and shareholder relations, previously reporting to the CFO, will now report directly to the CEO. Anderson said the move represents his increased emphasis on the company’s communications with the investment community.
The staffing actions are the first major changes revealed since it was announced in early October that Chairman Richard B. Priory would be retiring and Anderson, a former CEO of PanEnergy and more recently the Australian firm BHP Billiton, would take over the post Nov. 1.
In addition to the pipeline start-up and reorganization, Duke Energy on Friday also announced the signing of an agreement to sell its Energy Delivery Services (EDS) business unit to The Shaw Group Inc. for $22.5 million. Expected to close by the end of the year, the sale is part of Duke Energy’s efforts to align its portfolio of businesses and resources with its core assets and business strategy.
The EDS unit provides design, engineering, procurement, construction, and upgrade and maintenance services of power transmission, substations and distribution systems for various customers.
“As Duke Energy sharpens its strategy around its core assets, it is appropriate to align EDS and its approximate 500 employees and contractors with the expansion initiatives of The Shaw Group,” said A. R. Mullinax, executive vice president of Duke Energy Business Services. “Shaw is a global leader in comprehensive infrastructure services, and EDS will fit strategically within their organization.”
EDS is currently under contract to assist in maintaining portions of the transmission system owned by Duke Energy’s electric utility Duke Power Co., which will not be affected by the sale, as these contracts will continue with Shaw.
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