Subject: el paso and coastal announce their merged structure and office
locations
el paso , coastal consolidate pipeline staff
el paso energy and coastal corp . announced plans yesterday to relocate more
than 1 , 200 employees and retain only satellite offices at the el paso natural
gas headquarters in el paso , tx , and the anr pipeline headquarters in
detroit , mi , once their merger is approved by the ftc , which is expected
sometime in the fourth quarter . no final decision on staff reductions has
been made , an el paso spokeswoman said .
the companies intend consolidate the operations of their five pipeline
systems into three organizations , collectively led by john w . somerhalder ii .
under the consolidation plan , the combined company ' s nationwide pipeline
system will be consolidated into three regional operations . the western
region will consist of el paso natural gas company and colorado interstate
gas company and will be headquartered in colorado springs , co . the eastern
region will consist of anr pipeline and tennessee gas pipeline and will be
headquartered in houston . southern natural will make up the southeastern
region headquartered in birmingham , al .
john somerhalder will continue as the executive vice president of the el paso
pipeline group . patricia a . shelton , currently president of el paso natural
gas , will lead the consolidated western region pipelines . jay holm , currently
responsible for el paso ' s australian pipeline assets , will return to the
united states to become ceo of the eastern region . reporting to holm as
presidents of tennessee and anr will be stephen c . beasley and james j .
cleary , respectively . the southeastern region will be led by james c .
yardley , who will continue as president of southern . shelton , holm , and james
yardley will report to somerhalder .
" this consolidation will create the most effective organization for el paso ' s
pipeline system , " said el paso ceo william a . wise . " our upcoming merger with
coastal will create an interstate transmission system that spans the nation ,
border to border and coast to coast . this consolidation represents a highly
disciplined approach to managing this system , allowing us to strike a proper
balance between customer focus and operational efficiency . it also
facilitates a company - to - company exchange of expertise across our system and
speeds the merging of separate company cultures . "
while the companies will be organizationally merged , the five pipeline
systems will remain separate with separate tariffs and separate names . though
many back office functions such as accounting and gas control will be
consolidated and relocated to the new headquarters , field functions and
related activities will remain in their current locations . in addition , some
employees will remain in the el paso and detroit locations . the company will
ask affected employees whether they want to be considered for relocation .
those employees who elect not to relocate will be given severance packages .
most moves will occur during the first half of next year , and the majority of
the plan is expected to be implemented by mid - 2001 .
the companies announced their $ 16 billion polling - of - interests transaction in
january ( see daily gpi , jan . 19 ) . the merger is expected to be accretive to
el paso ' s earnings per share ( eps ) immediately and add more than 5 % to eps in
both 2001 and 2002 , wise said at the time of the merger announcement .
overall , the two companies expect $ 200 million in cost savings . by
comparison , the el paso - sonat merger created more than $ 100 million in
savings and more than 600 people lost their jobs .
the combined interstate transmission system of the new company will consist
of over 58 , 000 miles of pipeline , by far the most of any pipeline company in
north america . the system will transport more than 20 bcf / d of gas through
existing pipeline infrastructure , but will have sole or part ownership in
three other new or proposed major pipelines , including alliance , gulfstream
and independence . the company also will be the second largest gatherer of
natural gas in the united states and the third largest u . s . producer of gas .
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