Stamford, CT-based Louis Dreyfus Highbridge Energy (LDHE) unit Louis Dreyfus Energy Services (LDES) has agreed to settle for $4.084 million a commercial dispute with the federal government over natural gas contracts that were in effect between 2004 and 2008.

The dispute arose out of LDES' purchase of gas from the Interior Department's Minerals Management Service (MMS), which was abolished in 2010 by Interior Secretary Ken Salazar after an investigation uncovered corruption and mismanagement within the agency (see Daily GPI, Sept. 11, 2008). The MMS managed the sale of natural gas and other resources owned by the federal government.

The MMS has since been replaced by three agencies: the Bureau of Ocean Energy Management, Bureau of Safety, Bureau of Safety and Environmental Enforcement and the Office of Natural Resources Revenues (see Daily GPI, May 24, 2010).

During the 2004-2008 period, LDES purchased gas from MMS and paid the agency a total of about $500 million, according to the company, which markets gas, power and natural gas liquids. MMS claimed that LDES paid less than the agreed amount on certain days, while LDES said it paid the appropriate amounts agreed to in the contracts and that MMS' interpretation of the agreements was wrong.

Because MMS was a government agency, the commercial dispute was referred to the Inspector General for the Department of Interior. The company denied the allegations made by the government and agreed to settle the dispute without admitting to any wrongdoing or liability.

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