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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis-based ProLiance Energy, which has lost tens of millions of dollars in recent years amid falling natural gas prices, is being sold to Dallas-based Energy Transfer Partners.
The sale was announced late Tuesday by Evansville-based Vectren Corp., which owns 61 percent of ProLiance, and by Indianapolis-based Citizens Energy, which owns the other 39 percent of energy marketing firm ProLiance.
The sale price was not disclosed.
As of last year, ProLiance had about 100 employees based in Indianapolis. Energy Transfer Partners “plans to maintain an Indianapolis office and to retain most current ProLiance employees,” Vectren and Citizens said in a news release
Vectren said it will record an after-tax net loss related to the ProLiance transaction of up to $28 million, or 34 cents a share, in the second quarter.
It was unclear how the deal will affect Citizens, a public charitable trust that operates the city’s natural gas and water utilities.
In a recent filing with regulators, Vectren said its energy marketing group consisting of ProLiance had a $4.6 million loss in the first quarter.
But ProLiance has struggled for several years. For example, in the first nine months of 2012 it was hit with a $57.2 million pretax loss, which caused some analysts to speculate then that Vectren and Citizens would be shopping for a buyer for ProLiance.
ProLiance was formed in 1996 to sell and transport natural gas to industrial users and utilities. The company, based at 111 Monument Circle, has saved Citizens Energy and Vectren customers more than $200 million in lower natural gas costs over the years, according to Citizens CEO Carey Lykins.
Gas-marketing firms emerged after deregulation in the 1980s. They offer to find buyers for gas and arrange delivery, offering short- or long-term contracts.
Demand was strong for such services during a period when natural gas prices fluctuated wildly because gas contracts offered gas buyers a hedge against price volatility.
But margins of ProLiance have been squeezed more recently as natural gas prices have fallen. More natural gas became available from shale, and new gas pipelines around the country improved transmission capacity.
Finally, demand by industry for natural gas fell over the last several years as the economy sputtered.
Energy Transfer Partners has its own natural gas operations, including 47,000 miles of pipelines and storage facilities.
An ETP unit also owns Sunoco Inc. and Southern Union Co.
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