SABIC

Here's a follow-up to our SABIC conversations.

Doug did a great job on pitching Enron Online and answering all of their
questions. I pushed them hard over lunch about the next step and how we get
them to use Enron Online. I couldn't figure out why they were so hesitant
until Mohammad told me they were (I think I heard him right) equity investors
in Chem Connect. Quite simply, they know they made a mistake and need some
time to explain why they would invest in one system but want to use another.
What I need to do is follow up with a letter touting why they need to use
Enron Online and why is doesn't conflict with Chem Connect.

There is another way we can continue to solidify our relationship: In late
June their operations planning group will be in Houston (25-29). The
Operations Planning and Economics Studies Group is headed by Vice President
Al-Sadhan and would like to benchmark our operations, planning, budgeting and
performance reporting. They are looking for a broad overview and I think we
can put together a visit that sells Enron as a partner. The more SABIC
people exposed to us the better chance we have to make in roads. Who should I
work with on setting up what should be no more than a 2-3 hour visit?

Finally, I should update you on Saudi and the gas initiative. As you know,
when Oxy/Enron was invited into the Kingdom, SABIC approached me to partner
in the downstream portion of the project. Since that time, Enron has had to
notify the Saudi's that Oxy will be the lead, that we will not contribute an
equity or directly participate in any segment of the project, we will have
an advisory role and will not sign the MOU on June 3. It looks like the Saudi
reaction was to replace us with Marathon which is causing some heartburn with
Oxy as they sort out partnership shares, Oxy not wanting to drop below their
30%. I have talked to Oxy about SABIC and think I can keep SABIC's
partnership interest alive. It is just a very delicate situation right now
and Enron needs to stay quietly on the side lines until the signing on June
3.