Dynegy gains full ownership of former Enron pipeline
Dynegy Inc. exercised its rights to acquire the common equity of Northern Natural Gas Co. (NNG), a natural gas pipeline formerly owned by Enron Corp. of Houston.
By OGJ editors
HOUSTON, July 10 -- Dynegy Inc. exercised its rights to acquire the common equity of Northern Natural Gas Co. (NNG), a natural gas pipeline formerly owned by Enron Corp. of Houston. Dynegy reported last week that Enron's option to buy back the pipeline had expired June 30.
Houston-based Dynegy had gained temporary possession of the 16,600 mile line earlier this year after beleaguered Enron failed to repay a $1.5 billion equity infusion Dynegy made as part of its unsuccessful attempt to merge with Enron last (OGJ, Feb. 11, 2002, p. 38).
"Since we assumed ownership of the pipeline in February, we have been working on integration issues to ensure a smooth transition for customers and employees," said Steve Bergstrom, Dynegy president and chief operating officer. "With the uncertainty of NNG's repurchase behind us, we can focus our efforts on executing our strategy to optimize the value of the pipeline for our shareholders," he added.
Based on terms of the transaction, Dynegy said that Enron would continue to provide "certain transition services" associated with the system on a contract basis through January 2003. In addition, about 730 former Enron employees working for NNG have become employees of Dynegy.
Dave Neubauer, who joined NNG in October 1999, will continue to serve as interim NNG president.
NNG extends from the Permian basin in Texas to the upper Midwest US. The system can store 59 bcf of gas and has a market area pipeline delivery capacity of 4.3 bcfd.