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Enron Mail |
Thanks. Be sure to get Larry Lawyer, Brent Price, and Eric Groves=20
involved. This project is extremely important to Enron, and our LNG=20 strategy. If there are any resources you need, please let me know. =20 Jeff Emilio Vicens@ENRON_DEVELOPMENT 11/07/2000 03:11 PM To: Jeffrey A Shankman@ECT, Mike McConnell/HOU/ECT@ECT cc: Eric Gonzales@ECT=20 Subject: Jose LNG - Next Steps Jeff, The following summarizes the key next steps on the Jose LNG project: Immediate Next Steps ? Contracts: concentrate on modifying in-country agreements with PDVSA to= =20 allow execution in Dec 2000. - Participation Agreement: introduce and agree restructured marketing sche= me=20 which incorporates ENE and PDVSA off-take agreements - Gas Supply Agreement: introduce and agree a couple of small changes in= =20 order to reduce purchase price=20 =20 ENE exposure post agreement executions: $1.25MM after 7 months $4.0 MM after 7 months and for up to 12 months if ENE decides to stay in t= he=20 deal (ENE option) $20.0 MM after 19 months if ENE still decides to stay in the deal (ENE=20 option) ? Financing: confirm final financing assumptions and equity syndication=20 requirements - Debt: corroborate market funds availability, pricing, tenor, coverage=20 ratios and debt/equity ratio - Equity: define required project company IRR for equity syndication=20 (current assumption 18%) =20 ENE=01,s exposure: None prior to issuance of EPC notice-to-proceed (NTP= ) Post NTP release - if we can't acquire 3rd party capital, ENE would= =20 have to bridge =20 ? Markets and Nat Gas Swaps and Options: 1. Shift LNG destination to Higher Netback Markets: focus on gaining acces= s=20 to alternative regas terminals - Cove Point and Boston (currently modeling = =20 the two least attractive netback terminals in the US: Elba and Lake Charles= ) 2. Gas Swaps and Options: confirm value for Enron as a whole. Estimated M= TM=20 value of ENE offtake contract at the Gas Desk's Mid is $308MM coupled with= a=20 Project Company equity IRR of 18%.=20 It is our intent upon reaching agreement with PDVSA on our proposed changes= =20 and post appropriate RAC and Financing Group reviews, to circulate all=20 contracts for your final review and approval. If you require any additiona= l=20 information as to our current plans etc. please give me a call. Thanks=20 Emilio
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