Energy Transportation Group Inc. (ETG), New York City, has filed a federal lawsuit to block the sale by U.S. Maritime Administration (Marad) of three liquefied natural gas tankers.
The proposed sale stems from a settlement reached last month of a dispute over ownership and sale of LNG tankers (OGJ, Oct. 1, p. 28).
Marad's agreement covering the Arzew, Southern, and Gamma vessels is with units of Royal Dutch/Shell Group, Argent group, and Cabot Corp.
Marad acquired the tankers by repossession from subsidiaries of El Paso Corp.
ETG'S SUIT
The suit ETG filed in a Washington federal district court claims the Marad agreement calling for Cabot and Argent to buy the three vessels for $18.1 million each violates terms of the agency's original bid solicitation.
A hearing on a request by ETG for a temporary restraining order has been tentatively set for this week.
A company official said the hearing may be postponed until after Transportation Sec. Samuel Skinner has ruled on a separate request by ETG that he review the entire bid procedure used in the Marad deal.
Skinner earlier said he would not respond to the ETG motion before Oct. 22.
The ETG suit alleges several improprieties by Marad in reaching its accord with Argent, Cabot, and Shell, ETG said.
The deal calls for Cabot to buy one LNG tanker and for Argent to buy two LNG tankers which it would charter to Shell.
ALLEGATIONS
ETG's suit alleges the terms under which Argent and Cabot are to buy the vessels violate Marad's original bid solicitation in part because Argent, although a separate entity from Shell, is simply acting as Shell's agent for the deal.
Royal Dutch/Shell in 1988 purchased an exclusive option to buy the LNG carriers, but federal law requires the vessels to be sold to a U.S. citizen.
Shell nominated Argent to be the U.S. citizen buyer in the deal.
ETG also contends no money changed hands in the original deal until 9 months after the bidding period had closed.
Further, ETG alleges, terms of this latest accord still provide for sale of the tankers at below market value.
The official said ETG plans to bid "at least $25 million/ship."
AFTER BIDDING CLOSED?
In fact, the lawsuit says, Argent was formed after the original 1988 bidding process had concluded.
"As far as we know, there were no offers to buy (the tankers) from bona fide bidders," the ETG official said.
This new agreement, ETG claims, was simply the product of private negotiations between Marad and Shell to settle a suit that Shell filed last spring (OGJ, Apr. 16, p. 90).
That suit contested Marad's refusal to sell the tankers to Argent, contending that Shell had an exclusive option to buy them until Aug. 15 and that Argent was Shell's validly nominated U.S. citizen buyer.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
