NGI The Weekly Gas Market Report / NGI All News Access

Coral Energy Assets to be Tapped for Shell-Bechtel Venture

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 Shell's.

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 power stations.

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 10 Bcf/d.

Carolyn Davis, Houston

©Copyright 2000 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus