Enron Ascending

Part VExpanding Enron: 1994–1996

 

Introduction

In the mid-1990s, Enron was composed of five businesses: international energy infrastructure development, gas and oil exploration and production, interstate natural gas transmission, natural gas liquids, and natural gas and electricity marketing. Power generation, a stand-alone US-side business during the PURPA-driven boom, was reduced to an engineering division offering worldwide construction and operating services for power plants and pipelines.¹

Ken Lay’s company had two orientations. Iron-in-the-ground, traditional Enron was rooted in the old Houston Natural Gas Corporation, its 1984 acquisitions, and its 1985 merger with InterNorth. The 1980s Enron was a well-defined upstream-midstream energy company of wells, pipelines, storage, and gas liquids facilities, joined by gas-fired cogeneration plants and an emerging gas-marketing operation.

Liquids, once a stand-alone division, was now part of Enron Capital & Trade Resources (formerly Enron Gas Services). Included in Liquids were the troubled MTBE and methanol plants, expensively purchased from Tenneco in 1991. In 1992, the bulk of Enron’s liquid pipelines, also part of Enron Liquids Fuel Company in the Mike Muckleroy era, were spun off in the first public offering since Enron Oil & Gas (EOG) three years before.

After Enron Liquids Pipeline (ENP), Enron monetized assets by selling fractions of Northern Border Partners (stock symbol: NBP) in third-quarter 1993; EOTT Energy Partners ...