1 July 2002 – Dynegy Inc. said today that, with Enron Corp.’s option to repurchase Northern Natural Gas Company (NNG) expiring at 30 June, it had now assumed full ownership of the asset which was transferred to Dynegy as part failed rescue negotiations.
Dynegy exercised its rights to acquire the common equity of NNG’s parent after termination of its merger agreement with Enron Corp., through which Dynegy invested $1.5bn to acquire preferred stock and other rights in an Enron subsidiary that owns NNG. Enron maintained the option to repurchase the pipeline from Dynegy until yesterday.
“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. 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,” said Steve Bergstrom, president and chief operating officer of Dynegy Inc. “NNG is an excellent addition to our existing energy delivery network and will be a consistent, stable contributor to Dynegy’s earnings and cash flow.”
Dave Neubauer will continue to lead NNG as interim president, reporting to Dynegy Inc. President and Chief Operating Officer Steve Bergstrom. Neubauer joined NNG in October 1999 as vice president of Structured Products. He was promoted to vice president of Business Development and Marketing in March 2000 and was responsible for NNG’s commercial activities including transportation and storage marketing, trading, risk management and business development. Prior to joining NNG, Neubauer was with TransCanada Gas Services/Cibola.
Enron will continue to provide certain transition services related to the pipeline on a contract basis through January 2003. In addition, approximately 730 former Enron employees working for NNG have become Dynegy employees.
Dynegy said it would continue to pursue a strategic partnership or joint venture for a portion of the pipeline.
NNG provides transportation and storage services to its customers and provides cross-haul and grid transportation between other interstate and intrastate pipelines in the Permian, Anadarko, Hugoton, and Midwest areas.
NNG’s 16 600 miles of pipeline extend from the Permian Basin in Texas to the Upper Midwest, providing extensive access to major utilities and industrial customers. NNG’s storage capacity is 59 billion cubic feet (Bcf) and its market area capacity is approximately 4.3 billion cubic feet per day (Bcf/d).