Sonat
Sonat was a Birmingham-based American energy holding company focused on natural-gas transmission, marketing, exploration and production, and offshore drilling.
Last updated August 26, 2026
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Overview
Sonat, Inc. was a major American energy holding company headquartered in Birmingham, Alabama. Its corporate history began in 1928, when Christopher Chenery founded Southern Natural Gas Corporation. Although the company initially centered on natural-gas infrastructure, it developed into a diversified natural-resources group with activities spanning gas transmission, gas marketing, oil and gas exploration and production, offshore contract drilling, marine petroleum transportation, oilfield services, timberland, minerals and pulp and paper. The company’s most enduring business was natural-gas transmission. Southern Natural Gas built and operated pipeline interests serving the southeastern United States, while later Sonat businesses marketed natural gas and electricity. The company also held interests in major pipeline ventures, including Florida Gas Transmission, and operated or invested in pipeline systems such as Sea Robin and Destin. Its gas operations connected production areas with utilities, industrial users and other customers across the U.S. South and Gulf Coast. Sonat was also an important participant in the development of offshore drilling. In 1953, Southern Natural Gas created The Offshore Company after acquiring DeLong-McDermott, a contract-drilling joint venture. The Offshore Company commissioned what is described as the first jackup drilling rig in 1954 for Humble Oil. The offshore operation later became Sonat Offshore and Sonat Offshore Drilling. Sonat took the business public in 1993 and completed its divestment in 1995. After acquiring Transocean ASA in 1996, the former offshore subsidiary became part of the company now known as Transocean. Diversification continued through the acquisition of Teleco Oilfield Services in 1984, the purchase of Interstate Oil Transportation Company in 1981, and the expansion of exploration and production through the 1997 acquisition of Zilkha Energy. Sonat also developed timber and mineral holdings through Southern Forest Products, which managed more than 800,000 acres of southeastern timberland and natural-resource property at one stage. The Sonat name was adopted as the group’s corporate identity after a shareholder decision in 1981. The name combined elements of “Southern” and “Natural,” terms inherited from Southern Natural Gas. The identity was introduced across the company on January 1, 1982, as the diversified group consolidated its businesses under a single brand. During the 1980s, Sonat ranked among the largest U.S. companies and was one of Alabama’s largest corporations. By the late 1990s, Sonat’s principal businesses were natural-gas transmission, natural-gas and power marketing, and exploration and production. In March 1999, Sonat agreed to merge with El Paso Corporation in a transaction valued at approximately $6 billion. The merger was completed later that year, ending Sonat as an independent public company. Its exploration and production operations were integrated into El Paso, while Southern Natural Gas continued as a separate operating business. Southern Natural Gas subsequently became a 50/50 joint venture of Kinder Morgan and Southern Company after Kinder Morgan acquired El Paso in 2011. The Sonat corporate brand itself is therefore defunct, but parts of its operating legacy remain in successor energy businesses.
History
Sonat originated in Birmingham, Alabama, in 1928 as Southern Natural Gas Corporation, founded by Christopher Chenery. Its early identity was tied to natural-gas distribution and transmission. In 1953, the company separated its gas utility division into Alabama Gas Corporation, a business that later became Energen. The same year, it entered offshore contract drilling by acquiring DeLong-McDermott and creating The Offshore Company. In 1954, that subsidiary developed a jackup rig for Humble Oil, establishing an important early milestone in mobile offshore drilling. The company broadened its resource base in 1968 by forming Southern Forest Products to manage timberland and related natural-resource holdings. During the 1970s, it continued to expand and changed its corporate name in 1973 to Southern Natural Resources, Inc. The Offshore Company became wholly owned in 1978 and was subsequently branded Sonat Offshore. In 1972, the company moved into a new 30-story Birmingham headquarters, a building that later carried the AmSouth-Sonat Tower name. In 1981, shareholders approved another corporate name change, and Sonat, Inc. became the group’s principal identity on January 1, 1982. “Sonat” was formed from parts of Southern and Natural, reflecting the company’s historical roots while supporting a broader, more modern energy identity. During this period Sonat operated across pipeline transportation, exploration and production, offshore drilling, marine transportation, oilfield services, forestry and minerals. It was one of the largest companies headquartered in Alabama and became a prominent U.S. energy group. Sonat expanded its pipeline activities in 1986 by acquiring half of Citrus Corporation, which owned Florida Gas Transmission. It established Sonat Marketing in the late 1980s to sell natural gas and later electricity. Its exploration and production business operated through Sonat Exploration, with offices in Houston, Oklahoma City, Fort Smith, Shreveport and Tyler. The company also acquired Teleco Oilfield Services in 1984, gaining measurement-while-drilling technology that transmitted underground drilling data to the surface without stopping operations. Sonat sold Teleco to Baker Hughes in 1992. The offshore business was separated from the parent in stages. Sonat Offshore Drilling became publicly traded in 1993, and Sonat sold its remaining interest to shareholders in 1995. The former subsidiary later acquired Norwegian company Transocean ASA and adopted the Transocean name, creating the foundation of the modern offshore drilling company Transocean. Sonat also sold Sonat Marine in 1987 to a management-led group after acquiring Interstate Oil Transportation Company in 1981. In 1997, Sonat acquired Zilkha Energy, strengthening its exploration and production portfolio. By the end of the decade, the company’s core activities were natural-gas transmission, gas and power marketing, and oil and gas exploration and production. In March 1999, it announced a merger with El Paso Corporation valued at approximately $6 billion. The transaction was completed in 1999. Sonat Exploration was absorbed into El Paso’s exploration and production organization, while Southern Natural Gas continued as a distinct pipeline business. El Paso was later acquired by Kinder Morgan in 2011, and Southern Natural Gas became a joint venture owned equally by Kinder Morgan and Southern Company. Sonat no longer exists as an independent corporation, but several successor businesses preserve elements of its infrastructure and operating history.
- 1999
Sonat merges with El Paso
[1]The approximately $6 billion merger ends Sonat as an independent public company.
- 1997
Zilkha Energy is acquired
[1]The acquisition expands Sonat’s exploration and production operations.
- 1995
Sonat completes offshore divestment
[1]Sonat sells its remaining interest in the offshore drilling business to shareholders.
- 1993
Sonat Offshore Drilling is spun off
[1]The offshore drilling business becomes a separately listed company.
- 1992
Teleco is sold to Baker Hughes
[1]Sonat exits oilfield services by selling Teleco Oilfield Services to Baker Hughes.
- 1986
Florida Gas Transmission interest is acquired
[1]Sonat acquires 50 percent of Citrus Corporation, owner of Florida Gas Transmission.
- 1982
Sonat identity is launched
[1]The company begins operating under the Sonat, Inc. name and consolidates its diversified businesses under one identity.
- 1973
Corporate name changes to Southern Natural Resources
[1]The expanding group adopts the Southern Natural Resources, Inc. name.
- 1968
Southern Forest Products is formed
[1]The company enters timberland and pulp-and-paper activities through Southern Forest Products.
- 1954
First jackup rig is developed
[1]The Offshore Company creates a jackup rig for Humble Oil, an important early development in mobile offshore drilling.
Products and positioning
A diversified, infrastructure-led energy holding company with particular strengths in natural-gas transmission, energy marketing, exploration and production, and offshore drilling.
Natural-gas transmission · 1928
Southern Natural Gas
Sonat’s principal transmission business served the southeastern United States through pipeline infrastructure and related interests. Its portfolio included the Sea Robin Pipeline, South Georgia Natural Gas Company, a one-third interest in Destin Pipeline and half of Florida Gas Transmission. Southern Natural Gas remained a separate operating business after the El Paso merger.
Energy marketing · 1987
Sonat Marketing
Sonat Marketing was established to market and sell natural gas produced or transported through the company’s network. Its related Sonat Power Marketing operation also sold electricity, extending the company’s commercial role beyond pipeline ownership into energy trading and customer supply.
Oil and gas exploration and production
Sonat Exploration
Sonat Exploration was the group’s upstream division, headquartered in Houston and supported by regional offices in several U.S. oil and gas centers. It explored for and produced hydrocarbons in domestic operating areas. Following the El Paso merger, its assets and organization were incorporated into El Paso’s exploration and production business.
Offshore contract drilling · 1953
Sonat Offshore Drilling
The offshore drilling operation evolved from The Offshore Company, created in 1953, and operated mobile jackup rigs and other offshore drilling assets. It became Sonat Offshore Drilling and was separated from Sonat during the 1990s. After later corporate transactions involving Transocean ASA, the business became part of Transocean.
Oilfield services · 1984
Teleco Oilfield Services
Teleco supplied measurement-while-drilling technology that communicated subsurface drilling information to the surface while drilling continued. Under Sonat’s ownership, the business expanded internationally and grew substantially before being sold to Baker Hughes in 1992.
Brand decisions
1999
Merge with El Paso CorporationM&ABackground
The combination was presented as a way for El Paso to maintain competitiveness in natural-gas markets and combine complementary transmission, marketing and upstream operations.
Action taken
Sonat agreed to merge with El Paso in a transaction valued at approximately $6 billion. Sea Robin Pipeline was sold as a condition of completing the merger.
Aftermath
Sonat ceased to exist as an independent public company. Sonat Exploration was integrated into El Paso, while Southern Natural Gas continued as a distinct division.
Announced transaction value. (1999 merger announcement)
1993
Separate the offshore drilling businessStrategyBackground
Sonat’s offshore drilling activities had developed into a substantial specialized business distinct from its pipeline and upstream operations.
Action taken
Sonat spun off Sonat Offshore Drilling as a public company and completed its remaining divestment in 1995.
Aftermath
The offshore business later became associated with Transocean, while Sonat concentrated more heavily on gas infrastructure, marketing and exploration.
1981
Unify the diversified group under the Sonat nameStrategyBackground
Southern Natural Resources had expanded well beyond its original gas utility and pipeline roots into offshore drilling, exploration, marketing and other natural-resource activities.
Action taken
Shareholders approved a corporate name change, and the Sonat identity was introduced across the group on January 1, 1982.
Aftermath
The new name gave the diversified energy company a common market identity and became its principal corporate brand until the 1999 El Paso merger.
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