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Enron Mail |
Jason,
As requested, Enron is pleased to submit its proposal to own the oil and gas export pipelines for the Murphy Medusa project. The attached file is an addendum to Enron's non-binding proposal submitted on March 20, 2001. All terms and conditions included in Enron's March 20 proposal are applicable to the addendum unless specifically noted within the addendum. I will overnight an original signed hardcopy of the addendum to you this evening. Enron believes that the Pipeline Structure is a very attractive opportunity for the Venture. The ratio of un-guaranteed risk to the risked potential upside is well balanced. The differences you may notice in the Pipeline Structure value compared to the value you "backed out" of our original proposal are due to the inherent reduced efficiency in the Pipeline Structure. Specifically, A smaller deal size has a greater percentage of finance (bank/legal) fees. The highly efficient capital model designed for the Combined Structure is not able to be used on the Pipeline Structure. No residual value is assumed in the Pipeline Structure. If Enron were to be awarded ownership of the pipelines and subsequently awarded ownership of the FPS, the Venture would be able to take advantage of the Combined Structure tariffs. Please call me if you have any questions or comments concerning the addendum or Enron's original proposal. Regards, Kenn Loch 713-345-8962 ken.loch@enron.com
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