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Chris:
Assuming you can get comfortable with a percentage MMBtu enhancement from s= omeone like Garry Wilson (the only one I would trust) I would suggest a met= hod that would reflect more than the spread. The way I look at this is tha= t the liquids that are picked up in the gas stream as you withdraw from sto= rage is an unaccounted for gain. As such, if the MMBtu enhancement percent= age was 1% I would use a withdrawal volume of 101% of the injection volume.= We have to realize that in order to recognize this in the real world, the= Accounting Group would have to implement Accounting procedures that would = try to capture this value also. Because under normal Accounting procedures= for storage, barring completely emptying the facility of gas before refill= ing, this gain would merely remain in the ground with the remaining invento= ry. Accounting would have to recognize the difference between the MMBtu fa= ctor on the gas withdrawn and the average MMBtu factor of the gas injected = as a gain. We still need to live within the physical capacity constraints = This method more appropriately represents what you are gaining but increase= s your risk if the MMBtu enhancement percentage you use is too high! I wou= ld appreciate being kept informed of what MMBtu enhancement percentage is u= sed and how it is put in the model. =09Jim -----Original Message----- From: =09Cramer, Chris =20 Sent:=09Thursday, November 15, 2001 9:07 AM To:=09Schwieger, Jim Cc:=09Boyt, Eric Subject:=09MMBtu Enhancement Hi Jim,=20 I'm still working on the modelling of the Kathleen Ann storage and one of t= he issues I need to account for is mmbtu enhancement. How would you suggest= I account for this? Currently, to get the the intrinsic storage value, I t= ake the max working gas capacity times the may/jun - dec spread over the cu= rve. One idea is to just take the incremental mmbtus times the spread as we= ll -- although this wouldn't account for the physical capacity contraints, = it would put a value on the enhancement. Thanks, cjc
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