American Electric Power (AEP) said two of its affiliates, Houston Pipe Line Co. and AEP Energy Services Gas Holding Co., filed lawsuits on Friday against Enron and Bank of America in the Enron bankruptcy proceeding, seeking clarification on previous contract agreements regarding the 52 Bcf Bammel storage field and related pipeline assets in Harris County, TX.

AEP, which bought the Houston Pipe Line system, including 4,000 miles of intrastate pipeline in Texas, from Enron in June 2001 for $727 million, at the time also signed a 30-year lease for the 7,000-acre underground Bammel storage reservoir and related pipeline facilities. The pre-paid lease also included a right to renew for an additional 20 years.

At the time of the transaction, however, Bank of America claimed it had rights to some of the base gas in the field because of a $225 million gas monetization involving Enron in 1997. AEP said it obtained assurances from Bank of America regarding the gas monetization and obtained an exclusive “right to use” agreement covering the cushion gas from Enron and consented to by Bank of America.

However, Enron later filed for bankruptcy protection and Bank of America apparently change its mind on the issue.

“AEP has taken this action to accelerate resolution of issues associated with the Bammel storage related assets,” said Michael Miller, AEP’s deputy general counsel. “Our filing supports our position that we have the right to continue to operate these assets for the full period for which we contracted and paid. To try to avoid any uncertainty about our rights we are asking the bankruptcy court to confirm those rights.”

AEP is seeking a declaratory judgment from the court that its agreements and leases of Bammel capacity are not subject to rejection under Section 365 of the bankruptcy code.

The Bammel field has a working gas capacity of 52.2 Bcf and about 65.7 Bcf of base or cushion gas that is used to maintain geological structural integrity and to provide necessary pressure to withdraw working gas for sale and transport. The facility can deliver about 1.4 Bcf/d of gas. It also includes the Bammel Loop Pipeline, Houston City Loop Pipeline and the Texas City Loop Pipeline.

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