Sonat
| Company type | Public |
|---|---|
| Industry | Energy (natural gas transportation, marketing, oil and gas exploration and production) |
| Founded | 1928 |
| Founder | Christopher Chenery |
| Defunct | 1999 |
| Fate | Merged with El Paso Corporation |
| Headquarters | Birmingham , United States |
Area served | United States, international (offshore drilling) |
| Products | Natural gas transportation, marketing, oil and gas exploration and production, offshore drilling (until 1995) |
| Owner | Publicly traded on NYSE (ticker: SNT) |
Sonat, Inc. was a prominent American energy holding firm listed among the Fortune 500, headquartered in Birmingham, Alabama. Established in 1928 and publicly traded on the New York Stock Exchange under the ticker "SNT," Sonat specialized in natural gas transportation, marketing, as well as oil and gas exploration and production activities. Until 1995, the company was also involved in contract offshore drilling, which later evolved into Transocean. Renowned for pioneering advancements in natural gas transmission and offshore drilling, Sonat achieved multiple industry milestones. In 1999, it merged with El Paso Corporation.
Southern Natural Gas Corporation, 1928–1970s
The company originated in Birmingham in 1928, founded by Christopher Chenery as Southern Natural Gas Corporation. In 1953, it separated its natural gas utility operations to form Birmingham-based Alabama Gas Corporation, which eventually became known as Energen. That same year, Sonat acquired DeLong-McDermott and established The Offshore Company, which constructed the world’s first Jackup rig in 1954 for Humble Oil. By 1968, Sonat had broadened its scope by entering the pulp and paper industry through Southern Forest Products, Inc.
Southern Natural Resources, Inc., 1970s–1980s
In 1972, the company relocated to its newly built 30-story headquarters in downtown Birmingham—the First National-Southern Natural Building (later renamed AmSouth-Sonat Tower), co-owned with First National Bank of Birmingham. In May 1973, it adopted the name Southern Natural Resources, Inc.. The company accelerated its growth by acquiring full control of The Offshore Company in 1978 and renaming this division as Sonat Offshore.
Sonat Inc., 1980s–1999
During the 1980s, Southern Natural expanded significantly. After a stockholders’ meeting in November 1981, it transitioned to the name Sonat Inc., combining "So" from Southern and "Nat" from Natural—a brand already used for its exploration and offshore segments. This consolidated branding effort was implemented on January 1, 1982 by Anspach Grossman Portugal, Inc. of New York to solidify its identity within the energy industry. At that point, Sonat reported revenues of $2.4 billion, ranked among the largest corporations in the United States, and was Alabama’s leading company. Forbes recognized it as the top pipeline producer.
On March 27, 1986, Sonat enhanced its pipeline operations by purchasing a 50% interest in Citrus Corporation—the owner of Florida Gas Transmission—for $360 million. The following year saw the creation of Sonat Marketing to manage natural gas sales efforts. By the end of the decade, Sonat had established itself as a leader across natural gas pipeline distribution, exploration and production, as well as offshore drilling sectors.
In 1993, Sonat separated its offshore drilling division into a standalone entity named Sonat Offshore Drilling, Inc., completing full divestiture by June 1995. On November 23, 1997, it expanded its Exploration and Production segment through acquisition of Zilkha Energy for $1.3 billion.
Merger with El Paso
In March 1999, Sonat entered a $6 billion merger agreement with El Paso Corporation designed to strengthen their position within natural gas markets. At this time, Sonat was listed among the Fortune 500. Post-merger, Sonat’s Exploration & Production division was integrated into El Paso’s operations while its gas transmission unit—Southern Natural Gas Company—continued to operate from its Birmingham-area headquarters.
Sonat divisions
Sonat Inc. headquartered several of its key divisions within the AmSouth-Sonat Tower located in Birmingham, Alabama. The company also maintained additional offices in Houston, Oklahoma City, Washington D.C., New York City, and London. By 1999, Sonat’s principal business units encompassed natural gas distribution, marketing, as well as exploration and production activities.
Southern Natural Gas Company
The natural gas transmission segment of Sonat was represented by Southern Natural Gas Company, which was based in Birmingham. This division held ownership of the Sea Robin Pipeline, South Georgia Natural Gas Company, a one-third stake in Destin Pipeline, and half ownership of Florida Gas Transmission. In 1999, Sonat divested the Sea Robin Pipeline as part of finalizing its merger with El Paso. Post-acquisition by El Paso in 1999, Southern Natural Gas continued to operate as an independent division, retaining its headquarters at the AmSouth-Sonat Tower until relocating in 2007 to Colonial Brookwood Center near Birmingham. Later, Kinder Morgan took over El Paso in 2011.
Currently, Southern Natural Gas operates as a joint venture equally owned by Kinder Morgan and Southern Company.
Sonat Marketing
Based out of Birmingham, Sonat Marketing specialized in natural gas marketing and also managed Sonat Power Marketing, which was responsible for the marketing and sale of electrical power.
Sonat Exploration
Sonat Exploration Company was headquartered in Houston, Texas and oversaw exploration and production efforts. It maintained regional offices in Fort Smith, Arkansas, Shreveport, Louisiana, Oklahoma City, Oklahoma, Houston, and Tyler, Texas. Following the merger with El Paso, these regional offices were shut down and their assets absorbed into El Paso’s Exploration and Production division.
Sonat Offshore/Transocean
Originating in 1953 as The Offshore Company created by Southern Natural Gas to manage mobile jackup rigs in the Gulf of Mexico, this entity was renamed Sonat Offshore Drilling in 1982 and became publicly traded in 1993. By 1995, Sonat had completely divested from Sonat Offshore. In 1996, Sonat Offshore acquired Norwegian firm Transocean ASA and subsequently rebranded as Transocean Offshore. Today, Transocean ranks among the world’s largest offshore drilling contractors.
Sonat Marine
Sonat Marine was formed in 1981 following Sonat’s acquisition of Interstate Oil Transportation Company of Philadelphia for $109 million. At that time, Interstate was the largest independent marine transporter of petroleum products within the United States. In 1987, executives from Sonat Marine partnered to purchase the company from Sonat for $234 million.
Teleco Oilfield Services
To broaden its oilfield services offerings, Sonat purchased Teleco Oilfield Services for $141 million in 1984. Teleco specialized in measurement-while-drilling technology that allowed real-time data transmission from deep underground without disrupting drilling operations. Under Sonat’s ownership, Teleco’s annual revenues grew from $51 million in 1983 to $153 million by 1990, supported by a global workforce exceeding 1,300 employees. Its technology served offshore drilling operations throughout the Gulf of Mexico, North Sea, Middle East, Africa, and Asia. In 1992, Sonat exited this business segment by selling Teleco to Baker Hughes for $400 million along with a five-year royalty agreement entitling Sonat to 5% of certain technology revenues.
Southern Forest Products
Founded in 1968, Southern Forest Products oversaw more than 800,000 acres of timberland and natural resources throughout the southeastern United States. The division owned a 50% interest in Boise Southern, a pulp and paper mill partnership with Boise Cascade located in Louisiana, which Sonat divested to Boise Cascade in 1984. After this transaction, Sonat reorganized Southern Forest Products into Sonat Minerals and Sonat Minerals Leasing to maintain control over its land assets and mineral rights.