After hearing arguments on both sides, on April 16, 2007 the court declared the Gas Purchase Agreement ,date November 17, 2000, to be null and void.
The City of Leitchfield had entered into a contract with Kentucky Natural Gas Corporation to purchase gas from a gas field known as the Leitchfield Northeast Field.
According to court records the Northeast Field could not supply the city with the gas that was needed and the company wanted to substitute the gas from a field in Shrewsbury.
On November 15, 2001, the Leitchfield Utilities Commission agreed in regular session to purchase the gas from the Shewsbury Field if it met the quality requirements and specifications of the city.
On January 17, 2002, the commission met again and Chairman Kevin Pharris informed the commission that the gas analysis showed the BTU level to be below specifications and the nitrogen level above specifications in the Shewsbury Field.
Randy Manek, president of Kentucky Natural Gas Corporation assured the commission both levels would come into compliance when the well was put into operation.
The court records show KNG tied into the city's distribution system on February 1, 2002 and delivered gas from the Northeast Field from February 7, until February 21, 2002.
On February 22, Jimmy Wells, manager of the city's utilities company shut off the valve because he smelled gas and the company was contacted.
Gas was leaking from the KNG side of the valve and the problem was never corrected. No further gas was delivered from that field and the minimum gas required by the contract was never produced.
KNG was not able to produce the gas from the Northeast Field and according to court documents the commission met on March 21to discuss the fact the contract held with KNG was for gas from that field not the Shrewsbury field.
On April 3, the city sent a letter to attorneys for KNG stating the city felt the contract between the two companies was null and void and the city was not interested in entering into a new contract.
After meeting with Utilities Commission, on April 18, Manek was asked specifically whether or not he would be able to deliver gas at the minimum levels from the Northeast Field and could not provide any assurance.
KNG and its attornies then advised the city that it did not need to produce any gas from the Northeast field because it was producing gas from the Shewsbury Filed.
On May 30, 2002, the city filed a motion asking the courts to find the contract between the City of Leitchfield and Kentucky Natural Gas Company null and void.
KNG counter claimed stating that the contact had been modified to include the Shewsbury Field.
Judge Miller's ruling on the case stated, ”as a matter of law the contract was not modified. Based upon the failure of KNG to meet the production requirements from the Leitchfield Northeast gas field should be null and void and KNG'scounter claim should bedismissed without prejudice.”