Coral Energy Assets to be Tapped for Shell-Bechtel Venture
While an agreement is still under discussion and nothing has
been finalized, a Coral Energy official confirmed Friday that
parent company Royal Dutch/Shell and U.S. construction giant
Bechtel Enterprises will fold InterGen, InterGen North America and
certain assets of Coral Energy into one business.
Jimmy Fox, a spokesman for Houston-based Coral Energy, said that
he was unsure of the timetable, but knew that Royal Dutch/Shell
Chairman Mark Moody-Stuart had said there could be an announcement
of a deal in about four weeks. Moody-Stuart told Reuters in an
interview that he expects to announce news of a $3 billion project
with 50-50 power generation partner Bechtel "in a month or so."
Shell and Bechtel formed InterGen North America last year to
develop, finance, own and operate large-scale independent power
projects and co-generation facilities in the United States and
Canada. InterGen is an international power generation venture owned
by Shell Generating Ltd. and a subsidiary of Bechtel Enterprises
Holdings Ltd., which was founded in 1995. Coral is an affiliate of
Shell, first formed by Shell and Tejas Gas in 1995. Shell bought
Tejas in 1998, and last year, rolled all of its assets into
The deal to form one company will more closely align Coral's gas
and power assets with InterGen's and InterGen North America's
downstream gas division, Fox said. A separate stock market
flotation also could follow next year, according to Moody-Stuart.
In June, Bechtel and Royal Dutch/Shell agreed on a U.S. venture
that would give Shell 75% and the possibility of a separate stock
market listing in 2001. Most of the start-up assets are expected to
be the United States, with long-term plans to grow globally, both
organically and by acquisition. Bechtel would use the joint venture
to obtain construction contracts for Combined Cycle Gas Turbine
Shell had previously announced that it would expand InterGen's
one gigawatt generating capacity by 2002, with growth in the United
States, Europe, Argentina, Brazil, South Africa, Indian, China and
Malaysia. How the deal is structured with Coral's assets remains to
be seen, said Fox.
"Coral mostly has gas pipeline and storage facilities, and Coral
also has a certain amount of power generation assets," Fox said.
"But I cannot comment on what assets Shell would have in the
agreement." He said the new company would only involve some assets
of Coral's, and not the entire company.
Coral has quite a few assets to choose from --- pipeline, gas
transmission, gas storage, gas reserves and power generation
capacity. Its onshore pipeline system includes 6,100 miles of
dedicated unregulated intrastate pipelines, with an average
capacity of 5.5 Bcf/d and more than 300 pipeline interconnects.
Coral also has 128 Bcf of gas storage capacity. Coral also has
access to gas reserves in South Texas, the Gulf, including 2.5
Bcf/d of gas from Shell. Coral's gas sales volumes are in excess of
Carolyn Davis, Houston