El Paso Energy Corp. is selling Sea Robin Pipeline Co., a 1Bcf/d gas and condensate pipeline in the Gulf of Mexico offshoreLouisiana, to CMS Trunkline Gas Co., a subsidiary of CMS Energy.The system is west of Trunkline’s existing Terrebonne system. Thisacquisition is another stage in CMS Energy’s North American energyintegration strategy announced in March as part of the PanhandlePipe Line Companies acquisition. The sale of the asset by El Pasowas required by the FTC for approval of the company’s merger withSonat.

The Sea Robin Pipeline is owned by Southern Deepwater PipelineCo. LLC and Southern Offshore Pipeline Company LLC.

“The acquisition of Sea Robin allows CMS to significantlyincrease its gas supply gathering resources in the Gulf of Mexico,”said Chris Helms, president of CMS Panhandle Pipe Line Companies.”Sea Robin will give CMS another offshore pipeline system in themajor North American supply basin of the Gulf of Mexico and willprovide access to promising natural gas development areas of thecentral and western Gulf. This system, in combination with ourexisting assets, will be a platform for CMS to provide increasedgas services to producers and shippers, as well as providing newsupply sources for the company’s Trunkline Gas pipeline system.”

Sea Robin also is a key acquisition to developing the CMS FieldServices unit strategy, Helms added. “The company intends toemphasize the Gulf Coast as a new market and commercially operateSea Robin with our existing assets in the Texas and Louisiana GulfCoast to increase pipeline and gas processing capabilities,” Helmssaid. “Sea Robin’s direct access to new supply areas in the Gulf ofMexico will allow CMS Energy to integrate the expertise andoperations of its various business units to create uniqueopportunities for customers and further enhance the company’scommitment to creating an energy value chain.”

The Sea Robin system consists of five offshore valve platformsand one compressor platform, 405 miles of offshore pipeline, 40miles of onshore pipeline and one compressor station. The systemconnects to a producer-owned processing plant and liquidsseparation facility and accesses the Henry Hub.

Earlier this week, El Paso announced the sale of the East TennesseeNatural Gas Co. to Duke Energy Gas Transmission for $386.3 million instock (see Daily GPI, Jan. 6). Sale ofthe asset also was part of El Paso’s consent agreement with the FTC(see Daily GPI, Sept. 29).

With this latest deal, El Paso has made agreements fordivestiture of three pipeline systems as required by the FederalTrade Commission (FTC) in its approval of El Paso’s merger withSonat Inc. in October. All three sales, totaling approximately $620million, are expected to close in the first quarter of 2000,subject to FTC approval. El Paso Energy also agreed to sell itsone-third interest in Destin Pipeline Co. LLC for $160 million,subject to the first right of refusal of the interest by El PasoEnergy’s partners in the venture.

“The FTC required the sale of these assets in connection withits approval of our merger with Sonat,” said William A. Wise, ElPaso Energy CEO. “We are pleased with the terms of thesetransactions and do not anticipate problems or delays with the FTCapproval.”

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