Koch Receives Excuse Note from Antitrust Case

Months after an arbitrator awarded American Central Gas Technologies Co. $8.3 million in a ruling that Union Pacific Resources (UPR) and Duke Energy Field Services (DEFS) had monopolized natural gas processing in Panola County, TX, the companies are at it again, this time in an East Texas district courtroom (see NGI, Aug. 14, 2000).

Moments before the antitrust case was to begin on Wednesday, Koch Industries - a named defendant in the suit - reached a settlement agreement with American Central for an undisclosed amount. With Koch now out of the picture, the lawsuit is carrying on with the remaining defendants, UPR, which is now a subsidiary of Anadarko, and DEFS.

"Koch has reached an amicable settlement with American Central Gas Co. out of court," said a source close to the case. "Koch Industries is no longer part of the proceedings."

American Central Gas claimed in its lawsuit that its profits were damaged because Koch and UPR did not engage in competition against each other. Duke is included in the suit because it purchased UPR's processing facilities in 1999. In American Central's $17 million lawsuit, the company charged that due to the collusion between Koch, UPR and Duke, it was prevented from competing on its own.

The $8.3 million was awarded to American Central Gas in August for damages related to gas processing, said Teresa Wong, a spokeswoman with Anadarko. "Our position is that that should have been the end of it because the judge decided on it. Now they are going back on two of the three things that were already decided in arbitration. The judge has agreed to hear evidence on the gas gathering issue and the injunctive relief issue," said Wong.

"The arbitrator said that there were no damages for gas gathering, no harm was sustained by American Central and their gathering business," said Wong. The arbitrator also ruled there would be no injunctive relief.

"We are going to vigorously defend it, and if we are not successful, we are going to appeal," she said.

Alex Steis

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