By the time you read this El Paso Energy will be putting thefinishing touches on its merger with Sonat Inc., creating thelargest natural gas pipeline in North America in terms of miles andthroughput.
Late Friday, the Federal Trade Commission (FTC) cleared themerger of the two companies, which was the last stumbling block tothe transaction, when it signed a consent agreement that ordersthe merged company to divest Sea Robin Pipeline Co., East TennesseeNatural Gas Co. and its ownership interest in Destin Pipeline Co.L.L.C.
“We’re hoping to close the deal Monday [today], and thenintegrate the two companies immediately thereafter,” said NormaDunn, El Paso senior vice president over public relations. “We’repretty excited…we’ve been waiting for this for sometime,” shetold NGI. El Paso Energy first announced its intent to acquireSonat last March.
El Paso spokeswoman Paula Delaney said there were no surprisesfor the company in the FTC consent agreement. “It was exactly whatwe had agreed on previously.” A summary of the consent agreementwill be published in the Federal Register, and will be subject to a30-day comment period.
As for the companies to be sold, Dunn said “we are indiscussions with a number of companies, the identities of whichcan’t be disclosed. We certainly are seeing a lot of interest.” Theconsent order requires the merged company to divest itself of theseassets within six months. If they haven’t been divested by then,the FTC may appoint a trustee to carry out the sales.
In addition to the divestitures, the consent order requires theEl Paso-controlled Viosca Knoll Gathering Co. to provide access toany shipper, and to allow other pipelines to interconnect with itssystem. This would be done at the expense of the shippers andpipelines. Viosca operates off the coast of eastern Louisiana.
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