Months after an arbitrator awarded American Central GasTechnologies Co. $8.3 million in a ruling that Union PacificResources (UPR) and Duke Energy Field Services (DEFS) hadmonopolized natural gas processing in Panola County, TX, thecompanies are at it again, this time in an East Texas districtcourtroom (see NGI, Aug. 14, 2000).

Moments before the antitrust case was to begin on Wednesday,Koch Industries – a named defendant in the suit – reached asettlement agreement with American Central for an undisclosedamount. With Koch now out of the picture, the lawsuit is carryingon with the remaining defendants, UPR, which is now a subsidiary ofAnadarko, and DEFS.

“Koch has reached an amicable settlement with American CentralGas Co. out of court,” said a source close to the case. “KochIndustries is no longer part of the proceedings.”

American Central Gas claimed in its lawsuit that its profitswere damaged because Koch and UPR did not engage in competitionagainst each other. Duke is included in the suit because itpurchased UPR’s processing facilities in 1999. In AmericanCentral’s $17 million lawsuit, the company charged that due to thecollusion between Koch, UPR and Duke, it was prevented fromcompeting on its own.

The $8.3 million was awarded to American Central Gas in Augustfor damages related to gas processing, said Teresa Wong, aspokeswoman with Anadarko. “Our position is that that should havebeen the end of it because the judge decided on it. Now they aregoing back on two of the three things that were already decided inarbitration. The judge has agreed to hear evidence on the gasgathering issue and the injunctive relief issue,” said Wong.

“The arbitrator said that there were no damages for gasgathering, no harm was sustained by American Central and theirgathering business,” said Wong. The arbitrator also ruled therewould be no injunctive relief.

“We are going to vigorously defend it, and if we are notsuccessful, we are going to appeal,” she said.

Alex Steis

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