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Enron Mail |
Dan,
What is your opinion? I do not think El Paso could bind Enron. ---------------------- Forwarded by Phil DeMoes/Corp/Enron on 03/26/2001 04:33 PM --------------------------- Les Webber @ ENRON_DEVELOPMENT 03/26/2001 04:16 PM To: Phil DeMoes/Corp/Enron@ENRON, Frank W Vickers/NA/Enron@Enron cc: Subject: EL PASO MERCHANT ENERGY - Elba Island Transaction fyi. Let's explore this before we try to include any language in the Southern agreement. Les ---------------------- Forwarded by Les Webber/ENRON_DEVELOPMENT on 03/26/2001 04:22 PM --------------------------- Les Webber 03/26/2001 03:52 PM To: Daniel R Rogers/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dominic Carolan/Enron@EnronXGate cc: masseye@arentfox.com Subject: EL PASO MERCHANT ENERGY - Elba Island Transaction Gentlemen: The following provision is contained in Enron's binding Term Sheet dated October 13, 1999 with El Paso Merchant Energy: "If Enron Americas nominates gas for transportation on the SNG pipeline system, (i) Enron Americas or an affiliate thereof must have subscribed (directly from SNG) to firm transportation on the SNG system for a term not less than the lesser of ten (10) years or the then-remaining term of the Agreement, (ii) the Elba Island Facility must be, and remain during the duration of such firm transportation, the primary receipt point for such firm transportation, and (iii) such firm transportation (in MMBtu per day) shall be for a quantity equal to the quantity of gas (in MMBtu per day) nominated in the Redelivery Notice to be redelivered to Enron Americas on the SNG system ((i), (ii) and (iii) collectively, the "Firm Transportation Requirement")." Aside from the different possible interpretations of the language: "If Enron Americas nominates gas for transportation on the SNG pipeline system ...", I would like to understand your opinion on the ability of El Paso Merchant Energy to bind Enron to enter into an agreement with a party who is not a party to the agreement. Is this legally enforceable? After all, Southern Natural Gas does not have a similar obligation. If it were to be legally binding, under what terms and conditions would Enron be obligated to enter into such agreement? I am thinking in particular of the fact that Southern Natural Gas has received authorization from the FERC to enter into transportation arrangements at negotiated rates. If we were to locate a customer that could be accessed by means of a bypass pipeline at a lower effective cost than the Southern Natural Gas full rate, would we be entitled to hold out for a discounted rate with Southern Natural Gas? Please call me with any questions you have as you proceed to develop your response. Regards. Les
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