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Enron Mail |
Vince
Marc and I spoke about the JCC Brent relationship. I don't know enough about JCC to have a view if putting JCC on EOL is a good idea. Would be interested to know the realtionship to Brent and learn more about it. Also spoke to John Chismar about JCC. It sounds pretty non-liquid acc. to John. Let me know if there is something we can do. regards chris glaas Enron Capital & Trade Resources Corp. From: Marc De La Roche 13/10/2000 13:18 To: Chris Glaas/LON/ECT@ECT cc: Doug Leach/HOU/ECT@ECT, Kevin Kindall/Corp/Enron@ENRON Subject: Re: Japanese Crude Cocktail & Prompt Brent Chris, Thanks for the response. The comment about hedgeing JCC with Brent is right on if the exercise is to hedge our own LNG positions that we have tieds to JCC. Note that the high JCC correlation to Prompt Brent is not something that is obvious to non-Enron LNG-tied-to-JCC buyers. If you are an LNG-tied-to-JCC buyer, and you wish to hedge your purchases, wouldn't you want to be able to transact ona a JCC contract? My objective is to have a JCC contract on EOL, whereby we, Enron, take the JCC/Brent risk (which is why we asked Vince Kaminski's group to study the relationship and give us a hedge ratio to use). I'm attaching a model used to calculate JCC for Dabhol Power Co.'s Adgas and Oman LNG contracts. Basically what happens is that all the "raw oil" volumes imported into Japan and added up and the total price is divide by the total volume, and there is a Yen/US$ foreighn exchange component as well. That is JCC. It was designed by the Japanese so that they could tie their LNG imports to their average price of crude imports whereby the LNG would be cheaper on an MMBTU basis. Comments? Brgds, Marc Chris Glaas 10/13/2000 03:11 AM To: Marc De La Roche/HOU/ECT@ECT cc: Subject: Re: Japanese Crude Cocktail & Prompt Brent Marc regarding putting JCC on EOL I get a negative respons from our Sing office. It is not a very liquid market. Everyone is going the same way. I understand there is good correlation between Brent and JCC. I know little about JCC, but if there is good correlation u should be able to hedge yourself with Brent. I need to know more about how JCC works in order to help u, if u require any help at all? Let me know chris glaas Enron Capital & Trade Resources Corp. From: Marc De La Roche 10/11/2000 03:16 PM To: Chris Glaas/LON/ECT@ECT cc: Doug Leach/HOU/ECT@ECT, Larry Gagliardi/Corp/Enron@Enron Subject: Japanese Crude Cocktail & Prompt Brent Chris, Some of EGM's LNG Group's LNG is priced using a JCC-based formula. There's also a lot of other LNG contracts that use JCC as the pricing basis. In June we obtained sign-off from Vince Kaminski's group to hedge JCC using Prompt Brent (see the messages with the relevant hedge ratio below). Can we set up a contract on EOL, using the Prompt Brent-JCC hedge ratio, to hedge JCC? FYI, on a BTU conversion basis: Therefore, to hedge 1000 MT of LNG, a customer would need to transact on a hedge for 9000 BBL of JCC. Can we list a JCC swap in 9000 BBL/month increments? Thanks in advance, Marc ---------------------- Forwarded by Marc De La Roche/HOU/ECT on 10/11/2000 08:32 AM --------------------------- Kevin Kindall@ENRON 06/06/2000 03:47 PM To: Marc De La Roche/HOU/ECT@ECT cc: Subject: Re: JCC & Brent Yes on both counts. -Kevin K. From: Marc De La Roche @ ECT 06/06/2000 02:50 PM To: Kevin Kindall/Corp/Enron@ENRON cc: Grant Masson/HOU/ECT@ECT, Vince J Kaminski/HOU/ECT@ECT Subject: Re: JCC & Brent Kevin, Thanks for the information. For avoidance of doubt, please confirm: That the relationship means that to hedge ten thousand barrels of JCC in September '00, I would have to enter into a financial transaction for 6706 barrels of Prompt (August) Brent, and; That this email constitutes your groups (Vince Kaminski's) sign-off on using this hedge ratio to hedge JCC and JCC-based products? Thanks in advance, Marc de La Roche Kevin Kindall@ENRON 06/06/2000 02:18 PM To: Marc De La Roche/HOU/ECT@ECT cc: Grant Masson/HOU/ECT@ECT Subject: Re: JCC & Brent Good afternoon. I have performed a review of the JCC data that you sent some time ago. The study was done using several different Excel workbooks, and are available upon request. Relevant charts are embedded in the Powerpoint attachment. Questions/comments welcome. -Kevin Kindall
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