Panhandle Eastern and Texas Eastern were both known as pipeline companies and carriers of natural gas that helped to shape the nations appetite for energy. In 1989, Panhandle bought Texas Eastern for $3.2 billion, which at the time was the highest valued transaction for a natural gas pipeline in U.S. history. The combined companies became PanEnergy Corp. Later, Duke Power Co. absored PanEnergy ending the story of Panhandle as an independent organization.
The history of Panhandle Eastern began in turmoil and conflict. From its inception, Panhandle challenged a conglomerate of energy organizations that sought to nip the upstart energy company like a gardener nipping off an unwanted flower bud, but the upstart persisted and thrived as the growing U.S. economy demanded energy.
In November 1927, a group of entrepreneurs, most notably Frank Parrish, formed a partnership that eventually led to the creation of the Missouri-Kansas Pipe Line Corporation, commonly known as Mo-Kan. In 1929, Mo-Kan created a subsidiary called Interstate Pipe Line Company to construct a pipeline to the Midwest. In 1930, Parish and his partners began working with William G. Maguire, a successful entrepreneur, to promote and build that pipeline. Maguire convinced the partners to change the name of Interstate Pipe Line Company to Panhandle Eastern Pipe Line Company and to make Indianapolis the destination of their new pipeline. That pipeline would eventually run through and challenge the domains of Cities Service Company, Standard Oil of New Jersey, and the powerful Columbia Gas. Maguire, who later forced Parrish out, become the chairman and guiding force of PEPL until 1965. He transformed the company into an industry leader. The first major pipeline the company constructed was a 24-inch diameter pipeline stretching 860 miles from the Hugoton gas fields of southwest Kansas to the Illinois-Indiana border.
Texas Eastern arose out of World War II when German U-boats were devastating the U.S. merchant fleet and in particular the tanker fleet. The German submarines forced a dramatic decline in the number of barrels of oil the United States shipped to the industrial northeast and to Great Britain. The United States response the submarine threat was to build two oil pipelines to the northeast. The first line was the Big Inch, a 24-inch pipeline stretching from Longview, Texas to Norris City in southern Illinois. The second line was the Little Big Inch, a 20-inch pipeline running from the refineries in the area of Beaumont, Texas to Linden, New Jersey.
In 1947, the United States government needed to sell off the war assets, the largest of which were the Inch lines, and established a bidding process. In a controversial bid Texas Eastern, backed by the powerful Texas brothers of George and Herman Brown, placed the winning bid of $143,127,000. Soon, Texas Eastern converted the Inch lines to transport natural gas, which was rapidly growing sector of the energy industry. Eventually, Texas Eastern expanded into liquefied natural gas or LNG, North Sea oil and Houston real estate.
Panhandle Eastern changed its name to PanEnergy after absorbing Texas Eastern in 1989, but the company did not have a long life in that form. In 1996, Duke Power Company, an investor-owned utility with about 1.8 million customers, made a bid to purchase PanEnergy in a $7.7 billion deal that was consummated in April 1997. The combined companies then became known as Duke Energy Corp. with headquarters in Charlotte, North Carolina.