The Federal Trade Commission has issued a proposed consent orderrequiring Shell Oil subsidiaries Tejas Energy and Transok to divest171 miles of the 690 miles of natural gas gathering lines recentlyacquired from Coastal Corp. subsidiaries in Oklahoma and the TexasPanhandle.

Shell, which completed the acquisition of the gas gatheringassets from ANR Field Services and ANR Production Oct. 1, hasagreed to sell the properties to settle the FTC’s antitrustcomplaint, a spokesman said. While the company did not agree withthe FTC’s “narrow” reading of the competitive situation, “we agreedto the settlement to avoid further delay with the acquisition.”

A proposed consent order issued Thursday by the FTC saidTejas/Transok proposed to acquire certain of ANR’s gas gatheringassets in western Oklahoma, the Oklahoma and Texas panhandles andsouthwestern Kansas, as well as a natural gas processing plant inOklahoma.

The acquisition would substantially reduce competition fornatural gas gathering services, increase gathering rates and resultin an overall reduction in gas drilling and production in westernOklahoma and in the Texas panhandle, the FTC said. As initiallyproposed, the acquisition would substantially lessen gas gatheringcompetition in portions of Roger Mills, Beckham, Custer, Washita,Caddo and Grady Counties in western Oklahoma and Wheeler County inthe Texas Panhandle just west of the Oklahoma border. In thoseareas, without Commission action, gas producers would only be ableto turn to Transok or, at most, one other gas gatherer for gasgathering services. It is unlikely that the competition eliminatedby the proposed acquisition would be replaced by new entries intothe gas gathering market in these areas, the FTC added. Transok isthe largest gatherer and processor of gas in the six areas ofconcern to the FTC.

Under the order Shell and Tejas must sell certain parts of theANR pipeline systems in those areas by January 5, 1999. (FTC FileNo. 9810166). The spokesman said Shell currently is negotiatingwith a number of parties and is interested in talking with anyother potential buyers.

Ellen Beswick

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