El Paso Energy Corp. and Sonat Inc. completed their $6 billionmerger yesterday. As NGI reported earlier, the two companies jumpedthe final hurdle when El Paso agreed to the FTC’s terms to divestits 100% ownership in East Tennessee Natural Gas Co., Sonat’s 100%ownership of Sea Robin Pipeline Co., and Sonat’s one-third interestin Destin Pipeline Co., L.L.C. following the merger (see Daily GPI,Oct. 25). The transaction creates a transmission system comprisingover 40,000 miles, which El Paso said is the largest system inNorth America both in terms of throughput and miles of pipeline.The new El Paso’s pipeline systems will transport 12.4 Bcf/d-fullyone quarter of the natural gas volumes transported in the UnitedStates. The combined company will be headquartered in Houston.Sonat’s headquarters will remain in Birmingham, AL, and El PasoNatural Gas Co. will remain in El Paso, TX. William Wise,previously CEO of El Paso Energy, will retain his position in thenew company. Ronald Kuehn, who has been CEO of Sonat, is now thechairman of the board for the combined company until Dec. 31, 2000.
PG&E Gas Transmission (PG&E GT) announced yesterday thatit is conducting an open season and capacity rationalizationprocess on its Northwest mainline system to meet the needs ofelectric generation development in California and the PacificNorthwest. “Our objective is to maximize throughput on the PacificNorthwest system in a way that allows us to grow earnings and meetthe needs of the natural gas market,” said Thomas B. King, PG&EGT president and COO. “This open season and capacityrationalization process is an important step in that direction.”The open season will have two components: an open season forexisting long-term capacity, including 40,000 Dth/d at Kingsgateand 130,000 Dth/d at Malin, (began on Oct. 22 and will close Nov.17), and an open season for new capacity on the system (began Oct.22 and will end Nov. 29). If new mainline capacity is neededfollowing the capacity rationalization process, it will come online Nov. 1, 2001. “We will work with shippers to ensure that weare maximizing the use and value of our existing capacity beforeexpanding the mainline system,” said Peter Lund, vice president oftransportation and storage services.
The Natural Gas Supply Association (NGSA) last week called intoquestion Vice President Al Gore’s pledge to continue the drillingban along the Florida and California coasts if he’s electedpresident. “The producers of natural gas are dismayed by yourrecent announcement” to stop in its tracks any drilling along thesetwo coasts, where it’s believed more than 40 tons per cubic feet ofgas may be available, wrote NGSA President R. Skip Horvath in aletter to Gore. “Denying access to this environmental fuel, some ofwhich resides offshore, appears inconsistent with the goal for acleaner future.” Horvath urged Gore to reconsider his position andsaid “natural gas would welcome the opportunity to work with you toreach a consensus on this issue.”
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