Calpine requests court approval of settlement with Gulf South Pipeline

By Reshmi Basu

New York, Dec. 18 - Calpine Corp. asked for court approval of a settlement agreement between Calpine Energy Services, LP and Gulf South Pipeline Co. LP, which would resolve a claims dispute between the parties, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Gulf South operates an interstate pipeline system that extends from southern Texas to western Florida.

According to the motion, in 2002, CES and Gulf South entered into a firm transportation service contract. But in May 2006, CES rejected that contract.

In September 2006, Gulf South filed a motion asking CES to pay administrative expenses that they alleged were owed to them under the contract.

Under the proposed settlement, Gulf South will withdraw the September motion with prejudice. In return, the company will have a $16.47 million claim against CES.

A hearing is scheduled for Jan. 15.

Calpine, a San Jose, Calif., power company, filed for bankruptcy on Dec. 20, 2005. Its Chapter 11 case number is 05-60200.

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