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Enron Mail |
Enron Proposes $700 Mln Venezuela LNG Invest Over 3 Yrs
Dow Jones, 02/06/01 Market Talk/IN: India Bonds Up; Pft-Taking May Emerge Dow Jones, 02/06/01 Rating Agencies Tools of MNCs: Maharashtra The Economic Times, 02/06/01 Enron Walks Out of Proposed JV with Ispat Business Standard, 02/06/01 Generalitat Stops for a Breather Over Enron Plant Expansion, 02/06/01 Profits Escape Owner of Orange County, Calif., Electricity Generators Knight-Ridder Tribune, 02/06/01 California Power Crisis Creates Losses for Some Out-of-State Energy Firms Knight-Ridder Tribune, 02/06/01 El Paso Energy Plans LNG Terminals --- Company Will Spend $1.5 Billion on Facilities to Supply U.S and Mexico --- Projects Would Cost $250 Million to $350 Million Each The Asian Wall Street Journal, 02/06/01 Enron Proposes $700 Mln Venezuela LNG Invest Over 3 Yrs 02/06/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) CARACAS -(Dow Jones)- U.S. energy company Enron Corp. (ENE) has proposed a three year, $700 million investment in Venezuela's liquid natural gas sector, Domingo Marsicobetre, a vice president at state oil company Petroleos de Venezuela S.A, (E.PVZ), or PdVSA, said Tuesday. The proposal, for a facility at the Jose Industrial Complex in eastern Venezuela with PdVSA holding 25% of the venture, still has to be approved by President Hugo Chavez, Marsicobetre said. He didn't give a timeframe for the approval. The plant should produce 2.1 million tons per year in its first phase, according to local media reports. -Dow Jones Newswires, 582 564 1339; venezuela@dowjones.com MARKET TALK/IN: India Bonds Up; Pft-Taking May Emerge 02/06/2001 Dow Jones International News (Copyright © 2001, Dow Jones & Company, Inc.) 1624 Dow Jones] Enron India's decision to invoke central government financial guarantee to recover millions of rupees for unpaid power bills, accrued by Maharashtra State Electricity Board (MSEB), unlikely to harm overall foreign direct investor sentiment, says analyst; "it's unlikely to harm FDI...investors see it as an issue between two parties (Enron's Dabhol Power Co and MSEB) and are taking a more long-term perspective;" also unlikely to affect foreign portfolio investment. However, analysts say may damp sentiment in power sector.(SEP) Ratings agencies tools of MNCs: Maharashtra Girish Kuber 02/06/2001 The Economic Times Copyright (C) 2001 The Economic Times; Source: World Reporter (TM) MUMBAI THE MAHARASHTRA government on Monday denounced credit rating agencies Crisil and ICRA for downgrading the state's ratings. "We reject their judgement," the government said. "These agencies have considered just Enron's case in which we have refused to honour our contractual obligations by choice. It is our strategic decision not to pay Enron as we want to scrap the power purchase agreement the state has with the company," Jayant Patil, state's finance minister told ET on Monday. "Our decision not to pay Enron has nothing to do with the state's finances," he clarified. Significantly, this is for the first time since Enron controversy surfaced again the state government has put it on record that the non-payment has nothing to do with its financial situation. In an exclusive interview to ET immediately after the credit rating agencies downgraded the state's rating visibly agitated finance minister said: "We reject their views". According to Patil, these companies were looking at just Enron-issue. "They lack a balanced approach and their interpretation is wrong," he said and added: "No state corporation has defaulted on payments. We all are in sound position." "This is the most unfortunate decision based on faulty reasoning," said Patil. "The state government has already announced the decision to appoint an experts committee to review the Enron project. If the committee recommends to keep the existing PPA alive, we will pay Enron," he said. "If these agencies keep ignoring positive aspects of the state, then I must say that they are tools in the hands of the multinationals," Patil said. "We don't accept their judgments," he said. Enron walks out of proposed JV with Ispat Arijit De & S Ravindran Mumbai 02/06/2001 Business Standard 1 Copyright © Business Standard Global energy major Enron has decided to walk out of its proposed joint venture with the Ispat group to set up a 354 mw power project. The project, under Ispat Energy, was to be a captive plant for Ispat Industries and would have significantly brought down the production cost for the steel major. Ispat Energy was earlier to be part of Ispat Industries, but was later hived off following ballooning of project costs. Enron was to pick up 49 per cent equity in the venture at a cost of Rs 100 crore, while Ispat was to hold the balance stake. Confirming the development, an Enron spokesman said: "We can confirm that Enron will not be investing in Ispat Energy. We have also advised Ispat on this issue." Enron's decision is likely to be a body-blow for Ispat as its power costs from the state grid would almost be double that from its proposed captive power plant. Generalitat stops for a breather over Enron plant (La Generalitat se toma un respiro ante la central de Enron) 02/06/2001 Expansion Copyright(C) 2001 Abstracted from Expansion in Spanish, Source: World Reporter (TM) Local protests have forced a temporary stoppage in the construction of a power plant in Tarragona in the Spanish region of Catalonia. Residents in the area are complaining that "energy waste is always being dumped in the south of the region". The area, which will be affected by the national hydrological plan, already has two nuclear power plants, numerous initiatives connected to wind energy and two combined cycle plant projects, one by US multinational Enron Corp and another by Spanish natural gas company Gas Natural. The Enron plan to build Spain's biggest combined cycle power plant was the last straw. Residents' reaction has forced the regional government (Generalitat) to halt the project, which should be given the go-ahead in the next couple of days, for two to three months. The US company does not believe the plant, which would cost 600m euros (Pta100bn) and would have a total power of 1,600 megawatts, is in danger. Profits Escape Owner of Orange County, Calif., Electricity Generators James B. Kelleher 02/06/2001 KRTBN Knight-Ridder Tribune Business News: The Orange County Register - California Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM) California's energy crisis continues to generate windfall profits for many of the out-of-state companies that sell power here but not all are benefiting. Williams Cos., the Tulsa-based energy trader and gas pipeline operator, said Monday that its fourth-quarter earnings from continuing operations jumped almost 300 percent thanks, in part, to the sky-high prices the company has been able to charge for electricity in California and other Western states. But the robust results at Williams, which doesn't own any power plants in California, came at the expense of AES Corp. Arlington, Va.-based AES owns three generating plants in Southern California, including those in Huntington Beach and Long Beach. Back before skyrocketing electricity prices heralded the current energy crisis, AES inked a contract that essentially lets Williams buy all of the electricity produced at the three AES California plants for a predetermined fee. Under the deal, Williams delivers natural gas to the plants, AES turns the gas into electricity and Williams then sells the electricity on the state's grid or wherever it can fetch the highest price. "We're basically paid to do the conversion," says Ed Blackford, the manager of the Huntington Beach AES plant. So as California's electricity prices skyrocketed, the AES California plants have generated big bucks for Williams and nothing but headaches for AES. In fact, AES actually lost $11 million in the state in the fourth quarter because the profit generated by the Williams contract was wiped out by a $17 million fine AES had to pay for pumping illegal emissions into Southern California's air. Williams, on the other hand, said Monday that its earnings from continuing operations rose to $259.3 million during the fourth quarter, up from just $66.1 million during the same quarter last year. The company said the big increase in earnings, which beat Wall Street's expectations by a mile, reflected "substantially higher profits from the energy marketing and trading business." Because all of existing AES California capacity has been sold to Williams, AES is now scrambling to get regulators to OK a plan to refurbish two idled generating units at Huntington Beach and bring them back online. The units, which were shut down in 1995, could add 450 megawatts of fresh capacity each day and substantially turn around the California operating profits of AES. "Once we get the permit from the (California Energy Commission), we would need three months to bring the units online," says Blackford. In recent weeks, a number of other out-of-state companies active in California's energy market have reported earnings: Houston-based Dynegy Inc. said its fourth-quarter profit more than doubled to $106 million. Minneapolis-based NRG Energy Inc. said its fourth-quarter earnings jumped 50 percent to $42 million. Houston-based Reliant Energy Inc. said its fourth-quarter earnings from continuing operations were unchanged at $73 million. Houston-based Enron Corp. said fourth-quarter profit rose 34 percent to $347 million. California Power Crisis Creates Losses for Some Out-of-State Energy Firms James B. Kelleher 02/06/2001 KRTBN Knight-Ridder Tribune Business News: The Orange County Register - California Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM) California's energy crisis continues to generate windfall profits for many of the out-of-state companies that sell power here but not all are benefiting. Williams Cos., the Tulsa-based energy trader and gas pipeline operator, said Monday that its fourth-quarter earnings from continuing operations jumped almost 300 percent thanks, in part, to the sky-high prices the company has been able to charge for electricity in California and other Western states. But the robust results at Williams, which doesn't own any power plants in California, came at the expense of AES Corp. Arlington, Va.-based AES owns three generating plants in Southern California, including those in Huntington Beach and Long Beach. Back before skyrocketing electricity prices heralded the current energy crisis, AES inked a contract that essentially lets Williams buy all of the electricity produced at the three AES California plants for a predetermined fee. Under the deal, Williams delivers natural gas to the plants, AES turns the gas into electricity and Williams then sells the electricity on the state's grid or wherever it can fetch the highest price. "We're basically paid to do the conversion," says Ed Blackford, the manager of the Huntington Beach AES plant. So as California's electricity prices skyrocketed, the AES California plants have generated big bucks for Williams and nothing but headaches for AES. In fact, AES actually lost $11 million in the state in the fourth quarter because the profit generated by the Williams contract was wiped out by a $17 million fine AES had to pay for pumping illegal emissions into Southern California's air. Williams, on the other hand, said Monday that its earnings from continuing operations rose to $259.3 million during the fourth quarter, up from just $66.1 million during the same quarter last year. The company said the big increase in earnings, which beat Wall Street's expectations by a mile, reflected "substantially higher profits from the energy marketing and trading business." Because all of existing AES California capacity has been sold to Williams, AES is now scrambling to get regulators to OK a plan to refurbish two idled generating units at Huntington Beach and bring them back online. The units, which were shut down in 1995, could add 450 megawatts of fresh capacity each day and substantially turn around the California operating profits of AES. "Once we get the permit from the (California Energy Commission), we would need three months to bring the units online," says Blackford. In recent weeks, a number of other out-of-state companies active in California's energy market have reported earnings: Houston-based Dynegy Inc. said its fourth-quarter profit more than doubled to $106 million. Minneapolis-based NRG Energy Inc. said its fourth-quarter earnings jumped 50 percent to $42 million. Houston-based Reliant Energy Inc. said its fourth-quarter earnings from continuing operations were unchanged at $73 million. Houston-based Enron Corp. said fourth-quarter profit rose 34 percent to $347 million. El Paso Energy Plans LNG Terminals --- Company Will Spend $1.5 Billion on Facilities to Supply U.S and Mexico --- Projects Would Cost $250 Million to $350 Million Each By Alexei Barrionuevo Staff Reporter 02/06/2001 The Asian Wall Street Journal M9 (Copyright © 2001, Dow Jones & Company, Inc.) In another sign that the U.S. market for liquefied natural gas is heating up, El Paso Energy Corp. said it plans to spend at least $1.5 billion over five years to build a handful of terminals for handling LNG for the U.S. and Mexico markets. El Paso Energy, based in Houston, said it is considering six projects in all: three in the U.S., two in Mexico and one in the Bahamas. Five of the projects, which would cost from $250 million to $350 million apiece, would serve the U.S. market, where natural-gas prices are nearly three times higher than last year. Last week, Enron Corp., another Houston energy concern, said it plans to spend as much as $400 million to feed gas from the Bahamas to the growing Florida market. El Paso said it hopes to have its project running six months before Enron's. The rival projects underscore surging U.S. demand for LNG, a process that allows natural gas to be shipped but that generally adds significantly to the cost. While LNG has been a vital part of the gas supply in Asia, particularly in Japan, it has never enjoyed sustained success in the U.S., mostly because it has been too costly to compete with low U.S. natural gas prices. But over the past two decades, the cost of the process, which cools natural gas into liquid form, has come down 30% and the price to construct LNG tankers has dropped by a third, said Kathleen Eisbrenner, El Paso's managing director for global LNG. Still, high U.S. natural-gas prices are the key. Tight gas supplies in the U.S. drove average prices for natural gas to $3.89 per thousand cubic feet last year, up 71% from $2.27 a thousand cubic feet in 1999. To make El Paso's LNG bet worth the effort, natural-gas prices have to stay above $3 per thousand cubic feet over the next decade, said Ralph Eads, El Paso's president for merchant energy. Assuming prices hold at that level, "we think the LNG business will grow at 10% to 15% a year for the next decade. There is no other energy business growing at that pace," Mr. Eads said. In response, both El Paso and Williams Cos., a Tulsa, Oklahoma, natural-gas company, expect to revive mothballed terminals in the U.S. states of Georgia and Maryland in the next two years. El Paso's plans include a plant in a remote part of Mexico's Baja California that would feed gas markets in San Diego and Mexico, where gas demand also is growing rapidly. The company owns a site in Florida, has options on land in the Bahamas, is finalizing options on a site in the southern U.S. and is evaluating sites in Baja, San Diego and San Francisco. In addition, El Paso said it is building a terminal in Altamira, Mexico, to feed the Mexican market.
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