›› Enbridge to consolidate its operations in Spectra’s former offices near the Galleria:
Pipeline giant will consolidate its operations in the Galleria area at newly acquired Spectra’s home
The Canadian pipeline company Enbridge, following its acquisition of Spectra Energy last week, will leave downtown Houston and consolidate operations in Spectra’s former headquarters near the Galleria.
The move is among the first of the cost-cutting measures that Enbridge will take as it seeks to achieve $540 million in savings promised from the merger. Layoffs are coming, too, in Houston and other locations, but the timing and numbers have yet to be determined, Enbridge CEO Al Monaco said Monday in an interview.
Monaco, attending the annual CERAWeek energy conference, said most of the job cuts will come in overlapping corporate and administrative staffs that each company maintained before the merger. Enbridge earlier estimated that personnel reductions would account for about half the expected savings
from the merger.
“Whenever there is a combination of this magnitude, there’s going to be some duplication,” Monaco said. “We’re really focused on making sure we continue the growth momentum that we have, and that’s going to take people.”
Enbridge closed on its $28 billion acquisition of Spectra on Feb. 27, shortly after clearing regulatory hurdles in the U.S. and Canada, leaving the merged company with nearly 17,000 workers, including almost 1,750 in Houston.
Enbridge will vacate its eight floors of prime downtown real estate in the 1100 Louisiana building, known as Enterprise Plaza, and relocate the more than 700 employees who work there to Spectra’s old headquarters on Westheimer Court by year-end.
Enbridge is the latest energy company to leave downtown. In September, Royal Dutch Shell said it would leave its longtime U.S. headquarters at One Shell Plaza and consolidate employees at the company’s Woodcreek complex and Shell Technology Center on the west side of Houston.
Exxon Mobil left downtown for its massive new campus by Spring. Among Houston’s 10 largest energy employers, only Chevron Corp. and CenterPoint Energy are still downtown.
Enbridge made the Spectra deal to enhance its gas pipeline position in the U.S. Enbridge’s assets were about 80 percent focused on crude oil and other liquids before the Spectra deal, which creates a roughly 50-50 balance between oil and gas for the merged company.
Enbridge gained a 90,000-mile network of gas and natural gas liquids pipelines from Spectra.
“Natural gas, we think, is going to be a huge part of the future,” Monaco said, citing the United States’ massive shale gas resources, as well as gas’ environmentally cleaner reputation compared to crude and coal.
The goal, he added, is to take a North American outlook, rather than focusing on individual nations. That would include shipping more gas to Mexico as well.
“To me, there’s no border,” Monaco said.
Enbridge’s three taxadvantaged partnership businesses all will remain headquartered in Houston with no plans for name changes or consolidation — Enbridge Energy Partners, Midcoast Energy Partners and Spectra Energy Partners. Former Spectra CEO Greg Ebel also remains with the company as the chairman of the merged Enbridge.