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---------------------- Forwarded by Todd Peterson/ENRON_DEVELOPMENT on
03/06/2001 01:53 PM --------------------------- "Kurman, Michael" <kurmanm@arentfox.com< on 12/12/2000 08:34:17 AM To: "'Todd.Peterson@enron.com'" <Todd.Peterson@enron.com< cc: "Massey, Eugene" <MasseyE@ARENTFOX.COM<, "Basu, Sumanto" <BasuS@arentfox.com< Subject: COU Answers Todd -- Following are some thoughts on Jane Michalek's questions. We've discussed these briefly with Gene (who is out of town on business); I expect he'll first become available by Wednesday evening. In the meantime, feel free to contact me by e-mail (kurmanm@arentfox.com) or telephone (202/857-6345) if you'd like to discuss. Regards. Question 1. Is there a relevant "Port Authority" at the EcoEl,ctrica terminal? If not, why is this contained in the document? Answer: Based on our previous inquiries, it is our understanding that the Puerto Rico Ports Authority (referred in the document) has jurisdiction, and that the Authority has a designated "Port Captain" with responsibility for the harbors of Guayanilla, Tallaboa and Ponce. We have not previously determined the full extent of the Authority's functions and/or regulatory authority. Question 2. In Section 2.1, is there an Attachment "A"? Answer: Although Attachment A has not previously been prepared, it was intended to be a verbatim listing of those marine and transportation-related requirements that were set forth among the 47 listed items in the Appendix (titled "Environmental Conditions and Mitigating Measures") to the FERC's Order of May 15, 1996, granting EcoEl,ctrica authorization under Section 3 of the Natural Gas Act. Among those which would be included are items #23 and #24 (relating to manatees and sea turtles). Question 3. Do the LNG Interests have an Emergency Response Plan? Does this Plan have references to actions required in 7.1? Answer: An "Emergency Response Plan" is not referenced in the COU, and we are uncertain as to the status regarding development or implementation of any such Plan -- either from the Coast Guard perspective or that of the FERC (see, e.g., item #45 of the FERC's Environmental Conditions and Mitigating Measures). Question 4. Do the insurance requirements of the "vessel interests" duplicate or override what is required of Cabot LNG in Section 6.2 of the sales contract? Should the LNG interests provide same insurance documentation? Ditto Section 12. Answer: The insurance requirements in Section 6.2(b)(viii) of the Sales Contract are general in nature. The insurance requirements in the COU -- a four-party agreement contemplated by, but beyond the scope of, the Sales Contract -- supplement the Sales Contract provisions and apply to the liability limits set forth in COU Clause 10. Regarding insurance documentation under Clauses 11 and 12, we assume that the LNG Interests could agree to mutual obligations (see, e.g., Clause 11.2 as to documentation by the Vessel Interests). However, we note that the COU is essentially geared towards an "Incident," and as an Incident is caused by an LNG Tanker, the Vessel Interests are the focus of Clauses 11 and 12.
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