BG plc, as one of the owners of a major North Sea gas transportation and processing system - the Central Area Transmission System (CATS) - today won a court case against an Enron subsidiary for its failure to pay monies owing under a contract relating to the transportation of natural gas to Teesside.

The High Court held that the Enron company, Teesside Gas Transportation Limited (TGTL), was legally bound to pay all monies it has withheld since March 1995, and that it was not entitled to reclaim earlier payments.

The sum involved, including the earlier payments, is in excess of £150 million. BG plc, which has interests of 51.18 per cent in CATS, through BG Exploration and Production Limited and BG North Sea Holdings Limited, will receive, in addition to earlier payments, a further sum of around £50 million plus interest on account of amounts withheld.

The CATS owners had initiated legal action after TGTL, now wholly owned by Enron, had withheld payments under the 15 year Capacity Reservation and Transportation Agreement (CRTA). The Enron company had claimed that the CATS owners had failed to comply with the CRTA and, as a consequence, no payments were due and the CRTA had terminated. Such termination, Enron said, would in turn lead to termination of the gas sales agreement between Enron Europe Limited and owners of the J-Block fields, in the central North Sea.

The Court affirmed that the CATS owners had made transportation services available to the Enron company and had, at all times, been capable of accepting, transporting and delivering 300 million cubic feet of gas per day in full compliance with the CRTA. The Court also affirmed that the CRTA was not terminated as Enron had alleged.

It was announced yesterday that Enron and the owners of the J-Block fields had re-negotiated their gas sales agreement. Also yesterday, TGTL withdrew its termination of the CRTA.