HOUSTON, Jan. 31 — Energy marketer Dynegy Inc. Thursday took temporary possession of Enron Corp.’s Northern Natural Gas pipeline and named Dan Dienstbier as the pipeline’s president.
Dynegy acquired the pipeline after Enron failed to repay a $1.5 billion equity infusion by Dynegy as part of a failed merger attempt with Enron last fall. After the merger proposal fell through, Dynegy claimed the right to acquire the pipeline, which was put up as collateral for the $1.5 billion in cash.
Unless Enron raises enough cash to buy back the pipeline, Dynegy is scheduled to take permanent possession at the end of June. Enron sued after Dynegy backed out of the merger and to stop Dynegy from taking over the pipeline. Under a deal, Enron agreed to give up its claim to the pipeline, if it can’t raise the $1.5 billion by June 30.
Dynegy abandoned the merger Nov. 28, alleging Enron failed to disclose the full scope of its financial problems. Enron hoped the proposed merger would save it from a bankruptcy filing. After it fell through, Enron filed for protection from its creditors Dec. 2 in a New York court.
Meanwhile, Dienstbier will be responsible for day-to-day operations of the pipeline until its ultimate fate is decided. Dienstbier served as an executive of the Northern Natural Gas pipeline before it was merged into the company that ultimately became Enron. In 1985 he was named president of Enron’s Pipeline Group but left the company in 1988.
From July 1992 until October 1993, Dienstbier served as chief operating officer of Arkla Inc., which was subsequently bought by a predecessor of Reliant Energy Inc., Houston. He left Arkla and became president and chief operating officer of American Oil & Gas Corp., a small exploration and production company, until it merged with KN Energy. He left American Oil & Gas in 1994 and 1 year later was appointed to Dynegy’s board.
Northern Natural Gas provides transportation and storage services in the Permian, Anadarko, Hugoton, and Midwest areas. It extends from the Permian Basin in Texas to the upper Midwest and has capacity totaling 4.3 bcfd.