Re: Synthetic storage

Hello everyone,

I have modified the storage valuation model to adopt the deal of synthetic
storage.
For the 11 month synthetic storage deal proposed by the
Peoples Energy , the model gives $0.51/mmBtu. Thus the People's bid for
$0.49/mmBtu is in line with the model.

I would be happy to discuss the details for everyone who is interested. In
essence, the model allows optimal injections
during March-May and optimal withdraws dring Dec-Jan. The model also
encourages the storage to be full at the
end of May, and empty at the end of Jan.

Zimin
x36388

Enron North America Corp.

From: Airam Arteaga 03/20/2000 01:50 PM

To: Scott Neal/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, Jim
Schwieger/HOU/ECT@ECT, Stinson Gibner/HOU/ECT@ECT, Zimin Lu/HOU/ECT@ECT,
Farzad Farhangnia/HOU/ECT@ECT, Fletcher J Sturm/HOU/ECT@ECT, Hunter S
Shively/HOU/ECT@ECT
cc: Ina Rangel/HOU/ECT@ECT, Kimberly Brown/HOU/ECT@ECT, Barbara
Lewis/HOU/ECT@ECT
Subject: Synthetic storage

The below meeting from Farzad Farhangnia, has been rescheduled to Wednesday,
March 22 at 3:00 pm in EB30C1.

Please call Rain at x.31560, if you have any questions or are unable to
attend.

Thanks,
Rain

---------------------- Forwarded by Airam Arteaga/HOU/ECT on 03/20/2000 01:40
PM ---------------------------

Farzad Farhangnia
03/17/2000 05:00 PM
To: Hunter S Shively/HOU/ECT@ECT, Fletcher J Sturm/HOU/ECT@ECT, Scott
Neal/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, Jim Schwieger/HOU/ECT@ECT,
Stinson Gibner/HOU/ECT@ECT, Zimin Lu/HOU/ECT@ECT, Farzad
Farhangnia/HOU/ECT@ECT
cc:
Subject: Synthetic storage

I have asked Stinson and Zimin, from the research group, to meet with us and
help price the inherent optionality in storage deals. We are meeting on
Monday
at 3:00 in room EB3127. Please let me know if you are unable to attend.

Regards,

Farzad