enron sells hpl and bammel american electric power buys houston pipe line
american electric power thursday announced it has made a major move to expand
its wholesale natural gas business in the southwest , agreeing to acquire the
2 . 4 bcf / d houston pipe line ( hpl ) along with the bammel storage field , one of
the largest storage fields in north america , from enron . aep said since some
details remain to be worked out , it was not disclosing the terms of the
transaction at this time . aep will be acquiring the stock of hpl and it
expects to complete the deal in the next couple months .
hpl , one of the two original pipelines joined by enron chairman ken lay to
form the company in the mid - 1980 s , has an extensive 4 , 400 mile transportation
and gathering system through southern texas . the 118 bcf bammel field ,
located near the houston ship channel market area , has a 65 . 7 bcf working gas
capacity and is known for its fast in and out capabilities . it has a 1 . 4
bcf / d peak withdrawal rate and a 365 mmcf / d injection capacity .
" adding hpl to our natural gas asset portfolio will help us reach our goal of
becoming a top - 10 gas trader and marketer , " said paul addis , executive vice
president for aep . the company currently is second in the u . s . in electricity
volume . " hpl will enhance aep ' s natural gas business with its multiple
connections into the production areas of texas , its numerous interconnects
with intrastate and interstate pipelines and its position in and around
houston as a premier provider of natural gas . "
aep , headquartered in columbus , oh , has numerous power generation plants in
the midwest and southwest , including a number of gas - fired plants in texas .
in 1998 it bought the louisiana intrastate gas ( lig ) system .
john olson , energy analyst with sanders , morris & mundy in houston , said " for
55 years hpl has enjoyed a reputation as one of the strongest pipelines in
the country . as a stand - alone operation it is first class . it ' s a very , very
strong asset . " he said hpl has been showing losses of $ 50 million a year or
more in recent years , " but those numbers are meaningless " because enron has
been using it at discounted transportation rates to underpin its marketing
efforts . olson said the sale is a continuation of enron ' s move to sell most
of its hard assets and become a soft asset player . " they are emphasizing
their trading . they are doing far better at trading . "
for one houston - based risk manager , the sale of hpl by enron was a question
of rate of return . the competition among intrastates in texas is fiercely
competitive and for gas delivered to the houston ship channel it can be a
game of half - cents , with a shipper on one of the multiple intrastates
undercutting another to try to shave a profit , he said . enron recognized this
and wanted out , he speculated .
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enron sells hpl and bammel
american electric power buys houston pipe line
american electric power thursday announced it has made a major move to expand
its wholesale natural gas business in the southwest , agreeing to acquire the
2 . 4 bcf / d houston pipe line ( hpl ) along with the bammel storage field , one of
the largest storage fields in north america , from enron . aep said since some
details remain to be worked out , it was not disclosing the terms of the
transaction at this time . aep will be acquiring the stock of hpl and it
expects to complete the deal in the next couple months .
hpl , one of the two original pipelines joined by enron chairman ken lay to
form the company in the mid - 1980 s , has an extensive 4 , 400 mile transportation
and gathering system through southern texas . the 118 bcf bammel field ,
located near the houston ship channel market area , has a 65 . 7 bcf working gas
capacity and is known for its fast in and out capabilities . it has a 1 . 4
bcf / d peak withdrawal rate and a 365 mmcf / d injection capacity .
" adding hpl to our natural gas asset portfolio will help us reach our goal of
becoming a top - 10 gas trader and marketer , " said paul addis , executive vice
president for aep . the company currently is second in the u . s . in electricity
volume . " hpl will enhance aep ' s natural gas business with its multiple
connections into the production areas of texas , its numerous interconnects
with intrastate and interstate pipelines and its position in and around
houston as a premier provider of natural gas . "
aep , headquartered in columbus , oh , has numerous power generation plants in
the midwest and southwest , including a number of gas - fired plants in texas .
in 1998 it bought the louisiana intrastate gas ( lig ) system .
john olson , energy analyst with sanders , morris & mundy in houston , said " for
55 years hpl has enjoyed a reputation as one of the strongest pipelines in
the country . as a stand - alone operation it is first class . it ' s a very , very
strong asset . " he said hpl has been showing losses of $ 50 million a year or
more in recent years , " but those numbers are meaningless " because enron has
been using it at discounted transportation rates to underpin its marketing
efforts . olson said the sale is a continuation of enron ' s move to sell most
of its hard assets and become a soft asset player . " they are emphasizing
their trading . they are doing far better at trading . "
for one houston - based risk manager , the sale of hpl by enron was a question
of rate of return . the competition among intrastates in texas is fiercely
competitive and for gas delivered to the houston ship channel it can be a
game of half - cents , with a shipper on one of the multiple intrastates
undercutting another to try to shave a profit , he said . enron recognized this
and wanted out , he speculated .
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