While an agreement is still under discussion and nothing hasbeen finalized, a Coral Energy official confirmed Friday thatparent company Royal Dutch/Shell and U.S. construction giantBechtel Enterprises will fold InterGen, InterGen North America andcertain assets of Coral Energy into one business.

Jimmy Fox, a spokesman for Houston-based Coral Energy, said thathe was unsure of the timetable, but knew that Royal Dutch/ShellChairman Mark Moody-Stuart had said there could be an announcementof a deal in about four weeks. Moody-Stuart told Reuters in aninterview that he expects to announce news of a $3 billion projectwith 50-50 power generation partner Bechtel “in a month or so.”

Shell and Bechtel formed InterGen North America last year todevelop, finance, own and operate large-scale independent powerprojects and co-generation facilities in the United States andCanada. InterGen is an international power generation venture ownedby Shell Generating Ltd. and a subsidiary of Bechtel EnterprisesHoldings Ltd., which was founded in 1995. Coral is an affiliate ofShell, first formed by Shell and Tejas Gas in 1995. Shell boughtTejas in 1998, and last year, rolled all of its assets intoShell’s.

The deal to form one company will more closely align Coral’s gasand power assets with InterGen’s and InterGen North America’sdownstream gas division, Fox said. A separate stock marketflotation also could follow next year, according to Moody-Stuart.

In June, Bechtel and Royal Dutch/Shell agreed on a U.S. venturethat would give Shell 75% and the possibility of a separate stockmarket listing in 2001. Most of the start-up assets are expected tobe the United States, with long-term plans to grow globally, bothorganically and by acquisition. Bechtel would use the joint ventureto obtain construction contracts for Combined Cycle Gas Turbinepower stations.

Shell had previously announced that it would expand InterGen’sone gigawatt generating capacity by 2002, with growth in the UnitedStates, Europe, Argentina, Brazil, South Africa, Indian, China andMalaysia. How the deal is structured with Coral’s assets remains tobe seen, said Fox.

“Coral mostly has gas pipeline and storage facilities, and Coralalso has a certain amount of power generation assets,” Fox said.”But I cannot comment on what assets Shell would have in theagreement.” He said the new company would only involve some assetsof Coral’s, and not the entire company.

Coral has quite a few assets to choose from — pipeline, gastransmission, gas storage, gas reserves and power generationcapacity. Its onshore pipeline system includes 6,100 miles ofdedicated unregulated intrastate pipelines, with an averagecapacity of 5.5 Bcf/d and more than 300 pipeline interconnects.

Coral also has 128 Bcf of gas storage capacity. Coral also hasaccess to gas reserves in South Texas, the Gulf, including 2.5Bcf/d of gas from Shell. Coral’s gas sales volumes are in excess of10 Bcf/d.

Carolyn Davis, Houston

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.