Freight weekly report

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---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 10/02/2000
12:09 PM ---------------------------

Enron Capital & Trade Resources Corp. - Europe

From: Chris Connelly 09/30/2000 10:56 AM

To: George McClellan/HOU/ECT@ECT, Stuart Staley/LON/ECT@ECT, Jeffrey A
Shankman/HOU/ECT@ECT, Mike McConnell/HOU/ECT@ECT, Kevin
McGowan/Corp/Enron@ENRON, Tom Mcquade/HOU/ECT@ECT
cc: Peter Bradley/LON/ECT@ECT, Jez Peters/LON/ECT@ECT, Candace
Parker/LON/ECT@ECT, Kenny Nicoll/LON/ECT@ECT, Dimitri Taylor/LON/ECT@ECT
Subject: Freight weekly report

Enron Shipping Services Weekly report 38/2000

Highlight
Sold four capes to Preag for next year from Colombia to Rotterdam at $7.30
and simultaneously bought four capes from Coeclerici at $ 7 to close out
position at a $150,000 profit. Fixed a Bocimar vessel for our October
commitment to Electrabel from Puerto Bolivar to Hunterston at $8.10 and also
fixed another Coeclerici vessel from Colombia to Rotterdam to cover our short
to Preag in November. Still have a late November short against Cargill from
Richards Bay to Rotterdam to cover within the next couple weeks.

On the ABC front, met with Elcano ( largest Spanish shipping company ) to
discuss a possible partnership to acquire ABC but quickly realised that they
do not have the stomach for such a big deal. However, did discover that they
are quite active on the LNG side and are about to close on a LNG vessel
purchase within the next couple weeks. We are definitely going to stay in
contact to potentially develop some alliances on the LNG side.

Late in the week heard that Bocimar had met with ABC not to purchase them but
to discuss a pooling agreement. From good sources were told that ABC had no
interest in Bocimar's offer and therefore we are planning on meeting ABC to
continue to express our interest in acquiring their fleet and more
importantly to continue to frustrate Bocimars'attempt to control the cape
fleet.

We have completed our 'Enron Shipping' powerpoint presentation for EOL and we
expect to have a shipping section within the EOL platform by mid next month
in time for Coaltrans. This new platform will allow our customers to log
into EOL and go directly to our shipping web page to be able to trade with
us. Currently, customers have to access the international coal web page to
access our shipping products which does not make sense to our customers

Also Pierre met in Paris with Usinor ( 3rd largest steel mill in the world )
to discuss some potential freight deals and also express our interest to sell
them Synfuel next year to which they seemed quite interested. Will revert to
them with prices shortly.

Market
Short term Medium term Long Term
Handy Max Down Flat Flat
Panamax Down Down Down
Cape Size Flat Flat Flat

Panamax : Market fell all week long but not to a great extent due to some
worry about delays in US grain shipping activity
Capes : After a furious rally last week the market was flat this week as
owners and charters had fixed all their October requirements and were
starting to discuss November business with neither side wanting to commit
Crude markets remaining still over $30 a barrel even with the US trying its
hardest to make it deep into the mid twenties, has also continued to make
owners unwilling to discount next years freight rates
Deals Done
Physical Freight
ECS freight
Fixed 2+1 geared panamaxes from Indo to Hong Kong for November to January
2001 at $6.35.

Third parties freight deals
As mentioned above fixed with Preag, Bocimar and Coeclerici on Capes

OTC
FFA s
Bought 75,000 tons from SK Shipping from Colombia to Rotterdam at $ 8.15 for
October settlement

EOL
Traded with Bocimar twice and with Klaveness once this week. Life to date
total EOL trades are approaching 300,000 tons. Legal late this week has
finally authorised us to trade with NCSC on EOL so we expect to add another
counterparty shortly. Furthermore, we are planning a meeting with Calypso
fund management and credit to come to a solution to allow the fund to trade
with EOL

Deal Flow
Given the coal desk rates for Rustock, Mission, Spanish ports, Pier 9 to
rotterdam and also have sold to the coal desk a cape from Australia to
Rotterdam for Feb/March 01 loading

Miscellaneous
Our new operations person is joining us this Monday ( Dorte ) and she joins
us from Norden. Norden is a large Danish shipping company where she had been
working for the last 4 years

Travels
None.