---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 06/16/2000
05:50 PM ---------------------------

Enron North America Corp.

From: Eric Groves 06/16/2000 05:38 PM

To: Vince J Kaminski/HOU/ECT@ECT
cc: Scott Earnest/HOU/ECT@ECT, Eric Moon/HOU/ECT@ECT
Subject: Models

I will be in the office on Tuesday morning. Hopefully we can meet amongst
ourselves and then Shankman to discuss progress and next steps.

Thanks,

Eric

Eric's "book" model

Enron - LNG Project NPV model

Please see notes below. Let me know if you have any questions,
Marg. mb) 713-408-7961

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A few notes:

Summary: See columns F,G, and H
ENE Cash Inflow: (Henry Hub + Basis at Elba {Lake Ch was left out of the
analysis, see below}) x Unloaded volumes coming from Qatar, Algeria, &
Venezuela
ENE Cash Outflow: Fixed & Escalating COS at Elba + Fixed & O&M Charter Hires
for the Newbuild & Hoegh Galleon + Variable terminaling costs at Elba +
Voyage costs on the ships + FOB paid to Qatar, Algeria & Venezuela

Henry Hub Gas Price: Set to $3.55 through 2003, but then dropped to
$2.90/MMBtu. You can customize this column as you choose.

Loaded vs. Unloaded: Revenues are on loaded volumes, Costs are on unloaded
volumes. I had the unloaded / loaded percentage for both Newbuild and Hoegh
for both Algeria & Qatar. I didn't have them for Venezuela so I just
extrapolated based on the number of days it took to go round trip. Galleon To
come up with unloaded volumes, I just multiplied the percentage (unloaded /
loaded) by the loaded volume.

Lake Charles: I started to include this in the analysis, but in the end,
left it out... I don't think we need it unless we want to model spot cargoes
pre-Elba (pre-4/1/02) in the future. Adding it doubled the complexity of
everything. So, for all practical purposes, it doesn't impact the analysis
at all -- you'll see that all the Lake Ch costs are zero.

Ship Usage: I know you told me to run 50% coming from Algeria, 50% coming
from Qatar. However, you can get more volumes to Elba if you take 7.6
cargoes/yr from Qatar (running the Hoegh Galleon to its max) and 13.9
cargoes/yr from Algeria (not the full capacity of the Newbuild, but the max
of the Elba terminal capacity). Thus, this is how it's been modeled.
However, you won't see the volumes on the Newbuild until 1/1/03 (when the
charter starts? -- this is changeable in cell M26 {when you start shipping
volumes from Algeria to Elba via NB} and both AC25 and AD25 {when you start
incurring charter costs for the NB}). Regarding shipping from Venezuela, you
could either run the volumes from Venezuela using the Newbuild or the Hoegh
Galleon. I chose the Newbuild b/c its voyage costs were cheaper. The fixed
costs are there regardless of which ship you choose.

Shipping Voyage Costs: The voyage costs in $/MMBtu are calculated from the
voyages from Algeria (for the Newbuild) and Qatar (for the Hoegh Galleon) to
Elba. The Newbuild voyage costs should drop on 1/1/04 when the volumes start
coming from Venezuela (rather than Algeria), but they aren't currently
modeled that way.

FOB to Qatar/Algeria/VZ: This got a little complicated so I just plugged in
some fixed numbers. $1.00/MMBtu to both Qatar and Algeria, $2.30/MMBtu to
Venezuela.

NPV Calcs: I've done some, but delete them if you wish.

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