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                                                                    Exhibit 10.7

                               ARTICLES OF MERGER
                                       OF
                         CARDINAL EXTENSION COMPANY, LLC
                                       AND
                         CARDINAL PIPELINE COMPANY, LLC

         Pursuant to Section 57C-9-04 of the General Statutes of North Carolina,
Cardinal Extension Company, LLC, a North Carolina limited liability company
("Extension"), as the surviving limited liability company of the merger of
Cardinal Pipeline Company, LLC, a North Carolina limited liability company
("Pipeline"), with and into Extension (the "Merger"), hereby submits the
following Articles of Merger.

         1. The name of the surviving company is Cardinal Extension Company,
LLC, a North Carolina limited liability company. The name of the merged company
is Cardinal Pipeline Company, LLC, a North Carolina limited liability company.
Upon the effectiveness of these Articles of Merger, the name of Cardinal
Extension Company, LLC shall be changed to "Cardinal Pipeline Company, LLC."

         2. Attached as Appendix A is a copy of the Plan of Merger that was duly
authorized and approved by the unanimous consent of the members of Extension and
by the unanimous consent of the members of Pipeline in accordance with N.C.G.S.
Section 57C-9-03.

         3. These Articles of Merger will be effective at the following time:
9:00 a.m., Eastern Standard Time, Monday, November 1, 1999.

         This the 27th day of October, 1999

                           CARDINAL EXTENSION COMPANY, LLC

                           TRANSCARDINAL COMPANY, Member


                           By:    /s/ Frank J. Ferazzi
                              ------------------------
                           Name:    Frank J. Ferazzi
                           Title:   Vice President


                           PSNC CARDINAL PIPELINE COMPANY, Member


                           By:   /s Franklin H. Yoho
                              ----------------------
                           Name:    Franklin H. Yoho
                           Title:   Vice President



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                           PIEDMONT INTRASTATE PIPELINE COMPANY, Member

                           By:   /s/ Thomas E. Skains
                              -----------------------
                           Name:    Thomas E. Skains
                           Title:   Vice President


                           NCNG CARDINAL PIPELINE INVESTMENT CORPORATION
                           Member


                           By:    /s/ Terrence D. Davis
                              -------------------------
                           Name:    Terrence D. Davis
                           Title:   Vice President


                           CARDINAL PIPELINE COMPANY, LLC

                           PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INC.,
                           Member


                           By:     /s/ Franklin H. Yoho
                              -------------------------
                           Name:    Franklin H. Yoho
                           Title:   Vice President


                           PIEDMONT INTRASTATE PIPELINE COMPANY, Member

                           By:    /s/ Thomas E. Skains
                              ------------------------
                           Name:    Thomas E. Skains
                           Title:   Vice President




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                                                                      APPENDIX A


                                 PLAN OF MERGER
                                       OF
                         CARDINAL PIPELINE COMPANY, LLC
                   A NORTH CAROLINA LIMITED LIABILITY COMPANY
                                      INTO
                         CARDINAL EXTENSION COMPANY, LLC
                   A NORTH CAROLINA LIMITED LIABILITY COMPANY


I.       Limited Liability Companies Participating in the Merger

         The name of the limited liability company planning to merge is Cardinal
Pipeline Company, LLC, a North Carolina Limited Liability Company (hereinafter
sometimes referred to as "Pipeline" or the "Merging Company"), and the name of
the surviving limited liability company into which it plans to merge is Cardinal
Extension Company, LLC, a North Carolina limited liability company (hereinafter
sometimes referred to as "Extension" or the "Surviving Company").

II.      Effective Time of Merger

         The Merger of Pipeline into Extension shall become effective at the
time specified in the Articles of Merger to be filed with the Secretary of State
in accordance with N.C.G.S. Section 57C-9-04 (the "Time of Merger).

III.     Name of Surviving Limited Liability Company

         At the Time of Merger, the name of the Surviving Company shall be
changed to "Cardinal Pipeline Company, LLC" pursuant to the Articles of Merger
filed with the Secretary of State of North Carolina (the "Articles of Merger").

IV.      Terms and Conditions of the Merger

         At the Time of Merger,

         (a) Pipeline and Extension (together, the "Constituent Companies")
shall become a single entity which shall be the Surviving Company;

         (b) The separate existence of Pipeline shall cease;

         (c) The Surviving Company shall thereupon and thereafter possess all of
the properties, rights, privileges, immunities, powers, franchises and authority
of a public or of a private nature of the Constituent Companies and shall be
subject to all the restrictions, obligations, liabilities and duties of each of
the Constituent Companies;


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         (d) All property, real, personal and mixed, and all debts due on
whatever account, including promises to make capital contributions, and all
other choses in action, and all and every other interest of or belonging to or
due to the Constituent Companies shall be vested in the Surviving Company
without further act or deed;

         (e) The title of all real estate and interest therein vested in either
of the Constituent Companies shall not revert or in any way be impaired by
reason of the Merger;

         (f) The Surviving Company shall be responsible and liable for all
liabilities and obligations of each of the Constituent Companies, and any claim
existing or action or proceeding pending by or against either of the Constituent
Companies may be prosecuted as if the Merger had not taken place, or the
Surviving Company may be substituted in the action;

         (g) Neither the rights of creditors nor any liens on the property of
either of the Constituent Companies shall be impaired by the Merger;

         (h) The Articles of Organization of Extension in effect at the Time of
Merger shall become the Articles of Organization of the Surviving Company and
shall not be amended in any way in connection with the Merger, except that
Article I of the Articles of Organization shall be amended to change the name of
the Surviving Company to "Cardinal Pipeline Company, LLC."

         (i) The Operating Agreement of Extension in effect at the Time of
Merger shall become the Operating Agreement of the Surviving Company, in full
force and effect until amended or repealed as provided by law or by such
Operating Agreement, and shall not be amended in any way in connection with the
Merger except to change the name of the Surviving Company to "Cardinal Pipeline
Company, LLC."

IV.      Conversion of Membership Interests

         At the Time of Merger, the Membership Interest of each Member of
Pipeline shall be converted into a Membership Interest of the Surviving Company
and all Membership Interests in Pipeline shall cease to exist. Each Member of
Pipeline will receive a Membership Interest (expressed as a percentage) in the
Surviving Company that is equal to the net book value of its capital account in
Pipeline divided by the net book value of all capital accounts in the Surviving
Company (including the net book value of the capital accounts of the former
Pipeline Members). The Membership Interests in the Surviving Company to be
received by Members of Pipeline shall be in addition to any other Membership
Interests which may be held by such Members in Extension immediately prior to
the time of Merger.