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Enron Mail |
-----Original Message----- From: CoganJA@aol.com@ENRON [mailto:IMCEANOTES-CoganJA+40aol+2Ecom+40ENRON@ENRON.com] Sent: Friday, June 01, 2001 6:51 AM To: cfoster@enron.com Cc: sbreen@czn.com Subject: PPL/Griffith Test Gas Sales Agreement Chris, This is to confirm our conversation this morning: 1) Citizens has entered into a letter agreement that allows for it to sell gas to PPL during the plant operations testing phase. 2) Sales will be determined daily with the price being set at some discount to the border, but in no event to be less than Gas Daily Mid Point San Juan plus $0.50/MMBtu. The discount level will have to reflect the we cannot accept a put of any case back to us. 3) Enron participation in the deal would be as follows: a) Enron would recover the cost of: 1. Gas cost in the basin priced at Gas Daily Mid Point San Juan 2. TW fuel cost, currently approximately 4.75% 3. Daily demand cost of moving gas down the TW San Juan Lateral currently approximately $0.10/MMBtu. 4. Variable transportation cost on both the TW San Juan Lateral and Mainline. b) Enron would participate in the gross margins of any sale at 8.5%. Gross margins would be determined by subtracting the Enron's cost from the sales price. Chris, I hope that this properly reflects our conversation this morning. If it does not, please let me know. As a follow-up item, we really need to complete the gas supply agreement for the commercial operations and to also cover this arrangement during the testing phase. Citizens would appreciate a push on getting this done. I know that there may still be the issue with the operations agreement, but we should be able to get a draft out that would reflect the deal assuming concurrence on the operating agreement. Best regards, John Cogan For Citizens
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