Enstar Natural Gas Co., Southcentral Alaska’s natural gas distribution company, is on its way to becoming part of a Canadian energy infrastructure business, Calgary-based AltaGas Ltd.
AltaGas said Feb. 1 that it will pay more than $1.1 billion for natural gas businesses in Alaska and Michigan. Its acquisition of Semco Holding Corp. includes Semco Energy Inc. in Port Huron, Mich., Enstar Natural Gas and an interest in Cook Inlet Natural Gas Storage Alaska LLC.
Semco bought Enstar in 1999 from Houston-based Ocean Energy Inc., which had acquired it in March of that year when it merged with Seagull Energy Corp., which had purchased Enstar in 1985.
AltaGas said the transaction is subject to customary approvals, including regulatory approvals from the Michigan Public Service Commission, the Regulatory Commission of Alaska and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The regulatory process is expected to take some six months, putting close of the acquisition in the third quarter.
“AltaGas’ vision is to be a leading North American energy infrastructure company. This acquisition continues the successful execution of our growth strategy,” said David Cornhill, AltaGas chairman and CEO.
AltaGas’ website says Cornhill is a founding member of AltaGas Services Inc. and has served as chairman and CEO since the company’s inception in 1994.
“These assets come with strong management teams and employees who have a strong record of delivering safe and reliable service to their customers and have excellent relationships with the communities in which they operate,” Cornhill said in a Feb. 1 statement, adding that AltaGas looks forward to welcoming Semco management teams to AltaGas.
“We have a long history of operating natural gas utilities, and we will continue to delivery safe and reliable service to our customers,” Cornhill said.
The message was the same in Alaska.
“Enstar will continue to provide the same safe and reliable service relying on the same personnel, working from the same offices, doing the same work they do now,” Enstar’s director of corporate communications and customer service, John Sims, told Petroleum News Feb. 1.
“Colleen Starring will remain as president of Enstar Natural Gas and we really expect it to be a smooth transition,” Sims said.
AltaGas is an energy infrastructure business with a focus on natural gas, power and regulated utilities, the company said in its Semco acquisition announcement.
The company’s website says its utility group distributes natural gas to more than 119,000 customers, operating in Alberta through AltaGas Utilities; in British Columbia through Pacific Northern Gas; in Nova Scotia through Heritage Gas; and in the Northwest Territories through a minority interest in Inuvik Gas and the Ikhil Joint Venture, which produces and supplies natural gas in Inuvik, Northwest Territories.
Its gas business touches more than 2 billion cubic feet of natural gas a day, the company said, and includes natural gas gathering and processing, natural gas liquids extraction and fractionation, transmission and storage.
AltaGas owns 1.6 bcf per day of extraction processing capacity and 1.2 bcf per day of raw gas processing capacity.
Alaska acquisitions
AltaGas said Alaska assets in the acquisition include Enstar, which serves 132,000 primarily residential customers through approximately 414 miles of natural gas transmission pipelines and 2,800 miles of natural gas distribution mains in the Anchorage and Cook Inlet area. Enstar has experienced 2.5 percent compounded annual growth over the past 10 years in customer and net plant growth, and growth is expected to continue as Alaska continues to benefit from significant activity in the natural resource sector, AltaGas said.
The acquisition also includes Secmco’s 65 percent interest in CINGSA, Cook Inlet Natural Gas Storage Alaska, expected to be in service in the second quarter.
—Kristen Nelson
