COASTAL <CGP> SEEKS TO HALT BILLION DLR LAWSUIT
Coastal Corp said a federal bankruptcy
court will hear its request today for a restraining order to
stop a two billion dlr lawsuit against it by <TransAmerican
Natural Gas Corp>.
    TransAmerican, which entered Chapter 11 bankruptcy
proceedings in 1983 to reorganise its debts, filed the lawsuit
to block Coastal from taking control.
    Coastal spokesman Jim Bailey confirmed the company, which
is an unsecured creditor of TransAmerican, would present its
own reorganisation plan to the bankruptcy court.
    Under the plan, Coastal would buy the natural gas reserves
and pipeline system owned by TransAmerican in Texas for an
undisclosed amount.
    TransAmerican lawyer John Nabors said the company values
its total assets, including an unused oil refinery, at about
one billion dlrs.
    The company, the second-largest natural gas producer in
Texas, said it has gas reserves of 1.2 trillion cubic feet and
over 1,000 miles of pipeline and gas gathering lines.
    About 80 pct of TransAmerican's gas is available for spot
market sales in Texas during peak demand, it said.
    Nabors said the TransAmerican reorganisation would repay
its 770 mln dlr debt with profits from natural gas sales. The
lawsuit seeks one billion dlrs in actual damages and one
billion in punitive damages from Coastal.
    Coastal has been trying to break into the Texas gas market
since 1979, when it was forced to sell <Lo-Vaca Gas Gathering
Co> to settle over 1.6 billion dlrs in lawsuits by Texas
customers facing abrupt curtailment of supply.
    Coastal, a natural gas producer and pipeline company,
earned 71.6 mln dlrs on sales of 6.7 billion in 1986, about
half the its 1985 profits, due to slumping energy prices.
 REUTER
