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Enron Mail |
Dan -
FYI. Bruce ---------------------- Forwarded by Bruce Lundstrom/ENRON_DEVELOPMENT on 02/11/2001 09:32 AM --------------------------- Robert Mathis 02/11/2001 05:54 AM To: Bruce Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sandeep Katwala/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Paul Kraske/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Gail Brownfeld/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Subject: Oman LNG meeting The meeting with the Oman LNG delegation went well on Saturday, February 10, 2001. The meeting was attended by delegates from the Oman Ministry and Oman LNG, who were: 1. Talal Al Aufy - Marketing Director, Ministry Oil & Gas, Oman, 2. T. V. Suresh - Advisor, Ministry of National Economy, Oman, 3. Harib Al Kitani - Head of Marketing, OLNG, 4. Ms. Susan Farmer - Lawyer for OLNG (from Denton Wide Sapte in London), and Enron representatives: Jim Hughes, Wade Cline, Neil McGregor, Mohan Gurunath, Paul Kraske, Mukesh Tyagi, Rick Bergsieker (Global LNG team) and myself. Mohan Gurunath made the presentation, which contained the same information that we have shared with the lenders. The delegation asked questions, and the Enron representatives, mostly Jim and Wade, shared their views on the issues facing DPC. Generally, the discussion included a description of the makeup and expectations of the expert committee, and the need for the central government's involvement in resolving some of the problems related to the demand-supply of power, cost of power, transmission and distribution losses, power trading and sale to third parties. The discussion included a description of the security package. DPC noted that the outcome of discussions with the expert committee, state and central governments, and MSEB may require the PPA to be adjusted and the equity sponsors to realise less of a return on their capital. The parties did not discuss any specifics as to how or what will be the impact on the Oman LNG supply contract as a result of the discussions and resolution of issues between MSEB/DPC. Certainly no concessions for relief of the LNG supply contract obligations were offered by the Oman team (and none were or are expected). Clearly, the point made by DPC to the Oman team was that it was too early to discuss specifics, but that DPC would need to revisit the matter with the Oman team as and when developments occurred and events became clearer in the future. The Oman team asked what help they could be to DPC in the Oman team's discussion with the central government. DPC asked the Oman team to emphasize that the Oman government has made significant investments in Oman for the supply of gas to the DPC project, and that Oman urged and expected that the contracts between the various parties and DPC will be enforced and observed, and that the failure to enforce the contracts would be observed by Oman, and also by other countries and businesses in the world. The Oman team inquired about the status of the MetGas project and, generally about the gas market in India. DPC explained that MetGas is being put on hold until such time that the DPC controversy is settled. The Oman team understands that the MetGas business is being preserved, and that Enron will determine its MetGas investment strategy after discussions regarding DPC are finalised with MSEB and the state and central governments. The discussion included speculation on what various people thought may happen with other LNG terminal projects in India, and the possible related business connection or competition with the DPC terminal. Most people concurred that the DPC terminal could be used for serving a backbone gas pipeline business in India, that open access/carrier should be encouraged, and that it is possible though not likely that the another LNG terminal will materialise on the West Coast of India. The Oman team expressed that they are hearing that an LNG terminal in the state of Gujurat is still being pursued by Petronet with the support from the state owned gas pipeline company (GSPL). Robert
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