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Enron Mail |
Rod,
FYI - Here is Ted Robinson's (ENA) assessment of MTBE's situation for 2001. Sounds a lot like 2000. Our 2001 Plan is based on an average margin of $0.23 for MTBE. ---------------------- Forwarded by Kerry Roper/GPGFIN/Enron on 12/06/2000 03:06 PM --------------------------- Michael Mitcham 12/06/2000 11:27 AM To: James Prentice/GPGFIN/Enron@ENRON, Kerry Roper/GPGFIN/Enron@ENRON cc: Subject: 2001 MTBE Here is Ted's assessment. He does not mention Lubrizol value . I will call Ted for an update on Lubrizol. ---------------------- Forwarded by Michael Mitcham/GPGFIN/Enron on 12/06/2000 11:09 AM --------------------------- Ted Robinson@ECT 12/06/2000 10:23 AM To: Michael Mitcham/GPGFIN/Enron@ENRON cc: Subject: 2001 MTBE Per our discussion, I have talked with Adam on butanes for Q2/Q3 of 2001 and put a guess at next years MTBE. Adam feels the strip for butane would run around 58 cpg or so. Nat gas is on fire right now and looking at the screen is around 5.25 for that timeframe, which would put methanol around 60cpg. Elliott says that even with the run up on gas, methanol has yet to respond. Maybe it moves up if MTBE turns around and we see some demand come in, but for now it has stalled. During Q2/Q3 2000, MTBE was extremely volatile, ranging from 8cpg to 65cpg over merc gasoline ( with an average of 33cpg). Several factors contributed to this swing, including strong demand in Europe and the US due to tighter gasoline specs in both regions. These specs remain and to that extend, many of the factors that contributed to last summer's run up will be in place in 2001. As we close in on 2003, US demand should decrease as refiners, especially on the West Coast, gear toward a phaseout of the product. MTBE usage will remain in place in 2001 however as all contract users (refiners) are out for bids on product for the full year and Europe goes through a second round of tightening gasoline specifications. Gasoline is currently around 77cpg for the Q2/Q3 strip. I don't think that 20-25 cpg as an average over gasoline is an unreasonable assumption on which to base future Q2/Q3 economics. With butane at 58cpg and methanol at 60cpg, this would yield an MTBE price of 97cpg and a margin over feed cost of 19-24cpg. Q1 and Q4 will more than likely be somewhat lower, but provide ample margins in Feb/Mar as well as Sep/Oct . Hopefully this helps. If you have any further questions, give me a call. Ted
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