COLUMBUS, Ohio, June 1, 2001 -
American Electric Power (NYSE: AEP) announced today it has completed its purchase of the stock of Houston Pipe Line Company (HPL), an intrastate natural gas pipeline subsidiary of Enron Corp. (NYSE: ENE). The transaction includes inventory and a 30-year pre-paid lease related to the operation of the Bammel Storage Facility. The $726.6 million for the transaction will be raised by issuing a non-controlling, preferred equity interest to private investors.
The purchase, announced Jan. 11, 2001, was completed following clearance from the Department of Justice under the Hart-Scott-Rodino Act.
HPL owns, or leases, and operates one of the most extensive and flexible natural gas gathering, transportation and storage operations in Texas. HPL’s intrastate system includes more than 4,400 miles of pipe with capacity of approximately 2.4 billion cubic feet per day (Bcf/d) and the operation of the Bammel Storage Facility, one of the largest storage facilities in North America with a capacity of approximately 118 billion cubic feet and significant injection and withdrawal capacity.
"The acquisition of HPL complements our existing Louisiana natural gas assets and will contribute to our continued growth in natural gas marketing and trading," said Paul D. Addis, AEP executive vice president - wholesale. "We are ranked second in wholesale power volume and are ranked in the top 15 in natural gas with an immediate goal of reaching the top 10."
Combined with its Louisiana Intrastate Gas (LIG) assets, AEP will have a daily gas capacity of approximately 3.2 billion cubic feet, and more than 6,400 miles of natural gas pipeline traversing Louisiana and Texas. The HPL and LIG pipelines will remain physically separated. However the two units will be linked through a central control system and combined approach to commercial decision-making.
"Having a physical presence in the Texas marketplace will enhance our marketing capabilities. We intend to utilize the natural gas pipelines as a foundation to expand our highly successful gas trading business, and mirror the success of the wholesale power trading group," said Addis.
American Electric Power is a multinational energy company based in Columbus, Ohio. AEP owns and operates more than 38,000 megawatts of generating capacity, making it one of America’s largest generators of electricity. The company is also a leading wholesale energy marketer and trader, ranking second in the U.S. in electricity volume. AEP provides retail electricity to more than 7 million customers worldwide and has more than $45 billion in assets, primarily in the U.S. with holdings in select international markets. Wholly owned subsidiaries are involved in power engineering and construction services, energy management and telecommunications.
The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company’s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation, interest rates and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company’s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company’s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company’s future performance.
Pat D. Hemlepp
Director, Corporate Media Relations
American Electric Power