Anadarko Energy Services has accused Mountain Energy Corp., agas marketer in Kansas City, MO, and the company owners ofallegedly defrauding it out of millions of dollars throughnon-payment of natural gas, as well as theft of gas in storage.

In a civil lawsuit filed in the District Court of Harris County,TX, Anadarko Energy, the gas marketing arm of Anadarko Petroleum,claimed Mountain Energy “failed and refused” to pay for $17.8million worth of gas that it delivered to the marketer in July andAugust. Moreover, it said Mountain Energy has informed it that ithas no intention of paying for the gas.

Anadarko Energy also alleges the marketer robbed it of 3 Bcf ofgas that was supposed to be in an Oklahoma storage facility andready for delivery Oct. 1. Anadarko said it had purchased andpre-paid for the gas from Mountain Energy. “Apparently, MountainEnergy has removed Anadarko’s gas from the storage facilities forits own use without notice to or permission from Anadarko. MountainEnergy has, therefore, converted Anadarko’s natural gas,” it saidin the lawsuit.

As a result, Anadarko “has been forced to purchase substitutesupplies of natural gas from other sources and has incurredsignificant damages as well.”

The lawsuit accuses Michael Eichenberg and Rodrick Donovan,co-owners and sole shareholders and officers of the marketingcompany, of using Mountain Energy to “perpetrate a fraud againstAnadarko,” which is based in Houston. Each is “jointly andseverally liable for the conduct of Mountain Energy and the damagessuffered by Anadarko.”

Last February, Eichenberg provided a personal guaranty to ensurepayment by Mountain Energy for its gas purchases from Anadarko, andthe company also gave Anadarko a security interest in its assets toguarantee payment, according to the suit, which seeks recovery ofunspecified actual and punitive damages. Additionally, it seeks toestablish a constructive trust for payments Mountain Energy mayreceive as the result of the resale of gas that it either purchasedfrom (but did not pay for) or sold to Anadarko Energy. Efforts toreach both Eichenberg and Donovan on Friday were unsuccessful.

Reports that there were problems between Mountain Energy andAnadarko Energy surfaced earlier this month. At the time, MountainEnergy said it had to ask about 10% of its customers to converttheir fixed-priced supply contracts to index-based arrangements forthe remainder of their contract terms due to what it said was a”major dispute” with Anadarko Energy over the “hedging of ouraccounts.”

Both Mountain Energy and Anadarko Energy refused to discuss thedetails of the dispute then. Donovan went as far as to downplay theimpact it would have on the company’s customers, who are primarilylocated in Missouri and Kansas. In fact, he noted Mountain Energyhad given its nearly 700 industrial and commercial supply customersthe option to change gas suppliers, but only a handful (six toeight accounts) had elected to do so.

At the time, Donovan indicated the “hedging” dispute would”require some time to bring to closure,” and that Mountain Energywas in the process of trying to switch from Anadarko Energy to anew gas supplier.

Anadarko Energy is not the only company that has brought legalaction against Mountain Energy. In a lawsuit also filed in HarrisCounty, TX, Columbia Energy Services Corp. of Houston said it’sstill awaiting payment of $192,000 for gas it sold to the marketer.

Susan Parker

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