Profile: AGL Resources Inc (GAS)
25 Nov 2014
AGL Resources Inc. (AGL Resources), incorporated on November 27, 1995, is an energy services holding company whose principal business is the distribution of natural gas. AGL Resources operates its natural gas in seven states includes Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee and Maryland. As of December 31, 2011, the Company’s seven utilities served approximately 4.5 million customers. It is involved in several related and complementary businesses. The Company operates in five operating segments: distribution operations, retail operations, wholesale services, midstream operations, cargo shipping and one non-operating segment-other. On December 9, 2011, the Company completed its merger with Nicor Inc. In September 2014, AGL Resources closes sale of Tropical Shipping and Seven Seas Insurance businesses to subsidiary of Seattle-based Saltchuk Resources, Inc.
AGL Resources’s retail operations segment serves more than one million retail customers and markets natural gas and related home services to customers in Georgia, Illinois, Ohio, Florida and New York. The Company’s wholesale services segment provides natural gas storage arbitrage and related activities, natural gas asset management and related logistics activities for each of its utilities, as well as for non-affiliated companies. Its midstream operations segment provides natural gas storage arbitrage and related activities and engages in the development and operation of high-deliverability natural gas storage assets.
The Company’s distribution operations segment includes seven natural gas local distribution utilities. These utilities construct, manage and maintain intrastate natural gas pipelines and distribution facilities and include Nicor Gas (1) in Illinois, Atlanta Gas Light Company (Atlanta Gas Light) in Georgia, Virginia Natural Gas, Inc. (Virginia Natural Gas) in Virginia, Elizabethtown Gas in New Jersey, Florida City Gas in Florida, Chattanooga Gas Company (Chattanooga Gas) in Tennessee and Elkton Gas in Maryland. Atlanta Gas Light's role includes distributing natural gas for marketers; constructing, operating and maintaining the gas system infrastructure, including responding to customer service calls and leaks; reading meters and maintaining underlying customer premise information for marketers, and planning and contracting for capacity on interstate transportation and storage systems
The Company’s retail operations segment market natural gas and related home services, such as appliance repair and line protection plans to customers primarily in its utility service areas, but also in areas outside of its utility service areas. This segment also offers products that provide product protection and comfort services and natural gas and utility bill management services. These companies include SouthStar Energy Services LLC (SouthStar), Nicor Advanced Energy, Nicor Solutions, LLC (Nicor Solutions) and Nicor Energy Services Company (Nicor Services). Nicor Solutions, Nicor Services and Nicor Advanced Energy joined the Company’s business on December 9, 2011 as part of the Nicor merger and are wholly owned businesses.
The Company’s retail operations businesses, including SouthStar, Nicor Advanced Energy and Nicor Solutions, generate revenue through the sale of natural gas to residential, commercial and industrial customers, primarily in Georgia and Illinois. It also offers the customers energy-related products that provide for natural gas. SouthStar is a joint venture owned 85% by the Company and 15% by Piedmont Natural Gas Company, Inc. (Piedmont), markets natural gas and related services to retail customers on an unregulated basis, primarily in Georgia under the trade name Georgia Natural Gas. SouthStar also serves retail customers in Ohio, Florida and New York.
The Company’s wholesale services segment consists of its wholly owned subsidiaries Sequent Energy Management, L.P. (Sequent), Nicor Enerchange and Compass Energy (Compass). Sequent is involved in asset management and optimization, storage, transportation, producer and peaking services and wholesale marketing of natural gas across the United States and in Canada. Nicor Enerchange, which was integrated into Sequent as part of the Nicor merger, expands Sequent’s wholesale marketing of natural gas supply services in the Midwest, enables Sequent to serve commercial and industrial customers in the Midwest primarily in the northern Illinois market area and manage Nicor Solutions’ and Nicor Advanced Energy’s product risks, including the purchase of natural gas supplies.
The Company’s wholesale services utilizes a portfolio of natural gas storage assets, contracted supply from all of the major producing regions, as well as contracted storage and transportation capacity across the Gulf Coast, Eastern, Midwestern and Western sections of the United States and Canada to provide these services to its customers, consisting primarily of electric and natural gas utilities, power generators and large industrial customers.
The Company’s midstream operations segment includes a number of businesses that are related and complementary to its primary business. These businesses are its natural gas storage business, which develops, acquires and operates underground natural gas storage assets primarily in the Gulf Coast region of the United States and in Northern California. Golden Triangle Storage, Inc. (Golden Triangle Storage), the Company’s wholly owned subsidiary is designed for an initial 13.3 billion cubic feet of working natural gas capacity. Golden Triangle Storage owns an approximately nine-mile dual 24 inches natural gas pipeline to connect the storage facility with three interstate and three intrastate pipelines. As of December 31, 2011, of the approximate 6 billion cubic feet of working natural gas capacity available for subscription, Golden Triangle Storage had 4 billion cubic feet of capacity subscribed with a third party.
Central Valley Gas Storage, LLC (Central Valley), this wholly owned subsidiary, which joined the Company’s business as part of the Nicor merger, is developing an underground natural gas storage facility in the Sacramento River valley of north-central California. Sawgrass Storage, LLC (Sawgrass Storage), the Company’s 50% owned joint venture with Natural Gas Pipeline Company of America, Horizon Pipeline, which joined its business, as part of the Nicor merger, operates an approximate 70 mile natural gas pipeline stretching from Joliet, Illinois to near the Wisconsin/Illinois border. Nicor Gas has contracted for approximately 80% of Horizon Pipeline’s total throughput capacity of 0.38 billion cubic feet under an agreement.
The Company’s cargo shipping segment, which joined its business as part of the Nicor merger, consists of Tropical Shipping, multiple wholly owned foreign subsidiaries of Tropical Shipping. Tropical Shipping is a transporter of containerized freight and provides southbound scheduled services from the United States and Canada to 25 ports in the Bahamas and the Caribbean, interisland service between several of the Caribbean ports and operates from St. Thomas and St. Croix as its hubs in the Caribbean. In addition, it provides northbound shipments from those islands to the United States and Canada. Other related services, such as inland transportation and cargo insurance are also provided by Tropical Shipping or its other subsidiaries and affiliates.
Tropical Shipping’s southbound cargo consists of building materials, food and other necessities for developers, distributors and residents in the Caribbean and the Bahamas, as well as tourist-related shipments for use by hotels, resorts, and cruise ships. Tropical Shipping’s interisland shipments consist of consumer staples and northbound shipments primarily consist of apparel, rum and agricultural products. On average, approximately 70% to 75% of Tropical Shipping’s total volumes shipped are in the southbound market, 15% - 20% interisland and 5% - 10% northbound. Tropical Shipping’s contract consists of a southbound shipment of goods from Canada destined mainly for Puerto Rico. The Company’s cargo shipping segment also includes Triton, a full-service global leasing company and an owner-lessor of marine intermodal cargo containers.
The Company’s other segment includes its non-operating business units. AGL Services Company is a service company it established to provide certain centralized shared services to its operating segments. AGL Capital Corporation (AGL Capital), the Company wholly owned finance subsidiary, provides for its ongoing financing needs through a commercial paper program, the issuance of various debt and hybrid securities, and other financing arrangements. Its other segment also includes intercompany eliminations for transactions between the operating business segments.
AGL Resources Inc
Ten Peachtree Place NE,
P.O. Box 4569
ATLANTA GA 30302-4569