Columbia, SC-based SCANA Corp. said Friday it plans to merge its interstate natural gas pipeline subsidiary and intrastate pipeline subsidiary into a single interstate pipeline over the next six months, citing FERC’s stiffer affiliate-abuse standards and an increasing customer interest in managing their purchasing portfolios as the reasons.

The merger partners would include South Carolina Pipeline (SCPC), a 2,000-mile intrastate line, and SCG Pipeline, a 32-mile interstate that delivers natural gas in Georgia and South Carolina, according to the company. The new pipeline company, which SCANA has not named yet, would fall under the jurisdiction of the Federal Energy Regulatory Commission.

SCANA expects to file an application with FERC in the third quarter of this year seeking Section 7 authorization to operate the two sister pipelines as a single entity, said Sam Dozier, vice president of customer service and market development with SCPC. In addition, he noted the company has notified the Securities and Exchange Commission of its plans.

Dozier expects FERC to approve the merger in the spring of 2005. He then sees the combined pipeline being placed into service in the second quarter of 2005. It would have interconnects to Elba Island in Georgia, Southern Natural and Transcontinental Gas Pipe Line.

“We’re still working through the details of the asset transfers,” so SCANA does not know what the length of the combined pipeline will be, he noted.

SCANA decided to meld the two pipelines because of the “changes in the regulatory landscape at the federal level,” particularly FERC’s enactment of tougher standards of conduct for natural gas transmission providers that “make it difficult to operate them as independent pipelines,” Dozier said. In addition, he noted that a number of customers have expressed an interest in managing their own purchasing strategies.

“We are working closely with out customers to address any questions” that they may have, he told NGI.

“We believe most of our customers will embrace this change in our operations, and we will work very hard to help them through the transition. We will start that process immediately by contacting all of our customers within the next several days so that we can walk them through the details and answer any questions they might have,” said George Bullwinkel, president and COO of SCPC.

SCANA, a registered holding company, has regulated electric and natural gas utility operations, telecommunications and other diversified energy-related businesses. The company serves more than one million natural gas customers in South Carolina, North Carolina and Georgia, as well as about 574,000 electric customers in South Carolina.

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