Dec. 9 (Bloomberg) -- AGL Resources Inc., which completed its $2.5 billion takeover of Nicor Inc. today, will concentrate on absorbing the gas utility instead of acquiring interstate pipelines, the company’s chief executive officer said.
“Our focus immediately is more on integrating this transaction before we would look at another large transaction,” John Somerhalder said in a telephone interview.
With the purchase of Naperville, Illinois-based Nicor, AGL, based in Atlanta, is the largest standalone local gas distribution owner by customer count.
“It would be difficult for us compete with Rich Kinder to buy a lot of interstate pipelines, that is not our core,” Somerhalder said.
In October, Kinder Morgan Inc.’s Chief Executive Officer Richard Kinder led the energy industry’s biggest transaction in more than a year by acquiring pipeline-owner El Paso Corp. for $21.1 billion.
The U.S. gas industry should focus on creating domestic needs for the fossil fuel, which is being extracted from shale rock through hydraulic fracturing, Somerhalder said.
“Our first priority as an industry is to make sure we grow demand here,” he said.
He said he is supportive of projects to export gas through U.S. liquefied natural gas terminals if they have “good contracts” and win federal approval. Exports could provide “some stability” to prices, he said.
AGL supports federal pipeline safety legislation crafted in the wake of the explosion of a PG&E Corp. gas line that killed eight people last year in California, Somerhalder said.
“We think it is the right thing to do,” he said.
The proposal would increase fines for violations and require the installation of valves that can automatically shut the flow of gas on new systems.
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