As litigation over gas price manipulation allegations continues to mount following several settlements between gas marketing companies and the Commodity Futures Trading Commission (see Daily GPI, Aug. 1), EnCana Corp. said Thursday that it has temporarily withdrawn a request to have one case transferred to FERC until a decision is made on whether to combine the case with other class action lawsuits into one federal multi district litigation proceeding.

In a private lawsuit against EnCana and one of its subsidiaries, WD Energy Services Inc., filed by E. & J. Gallo Winery, EnCana said it withdrew its previously filed application that the court determine that the only appropriate forum for review of the matters raised is the Federal Energy Regulatory Commission. The application was temporarily withdrawn pending resolution of a motion to stay proceedings until a determination is made on whether to combine the claim with others under a broad multi district proceeding. EnCana said it expects to refile the application once that decision is made.

EnCana spokesman Alan Boras said there are nine lawsuits against the company involving allegations of gas market manipulation. There are many more cases against other companies involving similar allegations.

“Essentially the defendants are acting collectively on pursuing the [federal multi district litigation proceeding],” said Boras. “It’s part of how we are choosing to deal with all these lawsuits. The lawsuits have all been moved to a federal level, and there is expected to be a panel that will hear whether these cases will be coordinated. That is going to occur in October.”

The ninth lawsuit against EnCana was filed earlier this week in the U.S. District Court for the Southern District of New York. It was a class action suit against more than 30 companies, including EnCana and WD Energy Services, both of which recently were party to a $20 million settlement agreement with the Commodity Futures Trading Commission over allegations of gas market manipulation.

The New York lawsuit claims that the defendants’ alleged manipulation of natural gas price indexes resulted in higher prices of natural gas futures and option contracts traded on the New York Mercantile Exchange.

“The underlying factual allegations for this new action are already the subject of previously disclosed actions in California,” EnCana noted in a statement, referring to eight other case, including the Gallo case. “There is no assurance that there will not be other actions arising out of these allegations on behalf of the same or different classes.”

EnCana CEO Gwyn Morgan noted that the lawsuits relate to the discontinued operations of a Houston-based merchant energy subsidiary of the former PanCanadian Energy Corp., which merged with Alberta Energy Co. in January 2002 (see Daily GPI, Jan. 29, 2002).

“At the time of the merger creating EnCana more than one year ago, the decision was made to exit this business and the Houston merchant energy office was closed,” said Morgan. He said EnCana plans to vigorously defend against any claims of liability in these or any other related actions.

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