El Paso Corp.
[1] Prior to the takeover by Kinder Morgan, the company owned North America's largest natural gas pipeline system which traveled from border-to-border and coast-to-coast.
Source: The Pipeliners: The Story of El Paso Natural Gas, by Frank J Mangan, January 1, 1978, ISBN 978-0930208066 The company was founded in 1928 by Houston partners attorney Paul Kayser and H. Gordon Frost Sr. [(cattleman/rancher)], who identified the city of El Paso, Texas as a good market for natural gas transported by pipeline from Jal, New Mexico.They started with one employee, H. Gordon's wife Nell Streeter Frost ([secretary)] (not including the two principals), a tiny office, and a telephone.
El Paso owned, operated and developed the first in the world and one of the largest natural gas transmission systems in North America.
Paul Kayser, a young Houston attorney, and H. Gordon Frost Sr., 2nd generation Texas brahman cattle rancher, founded El Paso Natural Gas in 1928.
He proposed construction of a 200-mile pipeline that linked El Paso with natural gas wells located near the city of Jal, New Mexico.
Difficulties related to building Frost and Kayser's pipeline were amplified by the fact that his pipes would cross some of the most difficult terrain in the southwestern United States.
Although the work was tedious and time-consuming, Frost's and Kayser's crews pioneered new methods of welding, ditching, and crossing unique terrain.
Following the war, El Paso benefitted from strong demand for natural gas in the growing southwestern United States.
As the postwar economy and population boomed, cities throughout the region demanded energy sources to fuel growth and development.
Gains during that period were due in part to the completion of a 700-mile pipeline reaching from El Paso's Permian Basin operations to California.
El Paso's big gains during the late 1950s were partially attributed to its 1957 acquisition of part of the operations of Pacific Northwest Pipeline Corporation.
The acquisition gave El Paso a presence in several western and northwestern states, with pipelines reaching as far as Washington and connecting to other companies' networks in Canada.
"There is nothing more vital to our economy than the orderly, wise, and free use of our precious natural resources developed under practical, intelligent conservation policies," Kayser stated in 1954.
Although natural gas industry profits were generally cyclical, El Paso's overall sales and earnings grew during the period.
It stretched from northern Mexico to the northeast tip of Washington, with extensions throughout the Southwest and reaching into Wyoming, Idaho, and Oregon.
The company's largest non-gas division was its petrochemical business, which manufactured a variety of chemicals used in the growing synthetics industry.
Other of El Paso's subsidiaries were involved with mining, gas and oil exploration, insurance, copper wire, and real estate development.
In 1969, El Paso reached what it termed a "historic agreement" with Sonatrach, an Algerian national oil and gas company.
Although El Paso's liquified gas venture represented an important success during the 1970s, its non-gas-related operations were generally less fruitful.
In 1974, El Paso was forced to divest the holdings, effectively terminating its natural gas operations north of New Mexico and Arizona.
That act basically allowed El Paso to begin competing with other Texas companies for the purchase of natural gas reserves.
During the late 1970s and early 1980s, industry competitors had hustled to boost natural gas output capacity with expectations of strong demand.
Burlington was a $9 billion conglomerate active in mineral development, timber and forest products, and rail carrier systems.
Although El Paso was experiencing some problems at the time, Burlington viewed the company as an excellent complement to its existing mineral development operations.
Over the next few years, Burlington spun off or sold several of El Paso's nonperforming divisions and streamlined the company's natural gas operations.
It was the largest supplier of natural gas to the state of California and had successfully changed from merchant to transporter in compliance with new (1992) federal regulations.
In 2003, Oscar Wyatt and other shareholders sued the El Paso Corporation for allegedly misrepresenting its intentions for Coastal assets prior to the merger in 2000.
El Paso needed the cash to repay the mounting debt it had acquired from following the same business model as Ken Lay's Enron.
