Southern Natural Gas Company

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Southern Natural Gas Company is a Birmingham-based subsidiary of the Houston, Texas-based Kinder Morgan, Inc., through its El Paso Pipeline Partners division. It develops and manages natural gas pipelines in Texas, Louisiana, Mississippi, Alabama and northern Florida.

The business was founded in Birmingham in 1928 as the Southern Natural Gas Corporation in order to develop a natural gas pipeline from northern Louisiana to Birmingham and on to Atlanta, Georgia. Its first chief executive was Christopher Chenery. Despite the onset of the Great Depression, the company became profitable enough to pay dividends in 1936. During the 1940s, Southern Natural acquired other gas distribution companies in the region, including the Mississippi Gas Company and Chattanooga Gas Company. It purchased the Watts Building for its corporate headquarters in 1949.

In the 1950s, Southern Natural turned its focus to developing gas resources and spun off its Alabama distribution network as Alabama Gas Corporation in 1953 and its drilling technology and development division as The Offshore Company. In the 1960s, the company was known as Southern Natural Gas Resources, reflecting its focus on exploration and development of energy infrastructure. John Shaw took over as chairman in 1967. In 1968 the company expanded into forestry with its Southern Forest Products division (a partner in Boise Cascade) and into real estate through the Southern Natural Realty Corporation.

In 1972 the company became a lead tenant of the newly-built, 30-story First National-Southern Natural Building at 20th Street and 5th Avenue North. A year later, the newly-incorporated Southern Natural Industries, Inc. acquired Southern Natural Gas and its subsidiaries and completed its re-acquisition of the Offshore Company which it developed into Sonat Offshore Drilling, Inc.

Henry Goodrich took over as chairman in 1980. Southen Natural acquired the Interstate & Ocean Transport Company of Philadelphia, Pennsylvania that same year and operated it as Sonat Marine. The company name was officially changed to Sonat in 1982, and Goodrich pushed for more investment in exploration and production. By 1984, under CEO Ronald Keuhn, the company's gas distribution profits were funding a massive increase in exploration and drilling technology, including deep water drilling rigs, but the return on those investments was softened by a weaker market. In 1985 the corporation formed Sonat Minerals, Inc. and Sonat Minerals Leasing, Inc. to market the mineral resources on its forest land investments while also broadening its geographic area for gas distribution through acquisition in Florida and North Carolina.

Meanwhile, by 1990, Sonat's investments in exploration and gas production began to generate profits and the company purchased additional reserves in Oklahoma. The offshore drilling division was spun off (again) in 1993. Sonat Offshore Drilling acquired the Norwegian company Transocean and later merged with Sedco Forex and GlobalSantaFe before moving its corporate headquarters to Geneva, Switzerland. In 1997 Sonat acquired Zilha Energy of Houston, Texas.

In 1999 Sonat merged with the Houston-based El Paso Corporation. El Paso took over the exploration and development sides of Sonat and kept its gas transmission and distribution activities housed under the Southern Natural Gas Company name. That division remains in Birmingham. In 2007 it moved its offices from the Regions Center to Colonial Center at Brookwood Village.

References

  • Keeley, Carol I. (2006) "Sonat Inc." Gale Directory of Company Histories