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Enron Mail |
FYI, another perspective on market opening successes down here, accomplishe=
d=20 by Jose and the commercial team under Brett Wiggs. ---------------------- Forwarded by James M Bannantine/ENRON_DEVELOPMENT on= =20 10/27/2000 01:51 PM --------------------------- John Novak@ENRON 10/12/2000 06:54 AM To: Brett R Wiggs/SA/Enron@Enron, James M=20 Bannantine/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Federico=20 Cerisoli/SA/Enron@Enron cc: Randy Young/NA/Enron@Enron=20 Subject: TBG-Enersil transaction FYI, my "post-mortem" note to Jim Derrick and Rob Walls on this deal. ---------------------- Forwarded by John Novak/SA/Enron on 10/12/2000 09:51= =20 AM --------------------------- John Novak 10/09/2000 08:58 PM To: Stephanie Harris/Corp/Enron@ENRON, Rob Walls/NA/Enron@Enron cc: Robert C Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Randy=20 Young/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT=20 Subject: TBG-Enersil transaction Jim and Rob: I thought you might be interested in seeing a translation of an article tha= t=20 came out in Gazeta Mercantil (the "WSJ" of Brazil) the day we signed the=20 interruptible gas transportation contract with TBG. This is the deal we=20 discussed in which we got comfortable with in-country arbitration in Brazil= =20 based on the relatively small size of the deal, its consistency with our=20 practice in similar trading transactions in other parts of the world, and i= ts=20 importance to the commercial team in being able to implement our gas tradin= g=20 strategy in the region. As you can see below, despite the deal's small siz= e,=20 Enron's success in forcing open the market for interruptible gas=20 transportation in Brazil made a big impression. The commercial team tells = me=20 they now have their sights set on opening the firm service market. We'll b= e=20 hoping for similar success there. Regards, John Gazeta Mercantil, September 29, 2000. ENRON BREAKS STATE GAS MONOPOLY By Nicola Pamplona The state monopoly on transportation of natural gas ended today with the=20 execution of the first Fuel Transportation Agreement by a private entity in= =20 Brazil. Enersil, a subsidiary of the North American company Enron, will car= ry=20 1 million cubic meters of gas per day through the Brasil-Bolivia Pipeline= =20 (Gasbol), operated by TBG, a company which has Petrobr?s as a majority=20 shareholder. Negotiations with respect to the use of the pipeline have last= ed=20 for almost a year, punctuated by divergences on price and technical aspects= =20 of the services. The National Oil and Gas Agency (ANP) celebrates the execution of the=20 agreement with a ceremony to take place today at the agency=01,s headquarte= rs in=20 Rio de Janeiro. The agreement not only represents the opening of the marke= t=20 for transportation of natural gas, but also the end of the first arbitratio= n=20 proceeding submitted to the agency. According to the involved parties, the= =20 proceeding was very complicated due to the non-existence of previous=20 standards and to the fact that such market is only in its incipient stage. = So=20 much so that, after the ANP=01,s decision, it took over a month for the con= tract=20 to be ready for execution.=20 =01&ANP has guaranteed competitiveness to the market and also acquired=20 experience for future arbitration proceedings=018 says Enron Vice-President= to=20 regulatory affairs, Mr. Robert Gross. According to him, the proceeding lea= d=20 to the definition of a model contract which may be used for future interest= ed=20 parties in transporting gas through Gasbol. The main inclusion was the=20 distance factor to the tariff calculation, an issue that has never made par= t=20 of TBG=01,s plans under the argument that it would prevent the return of th= e US$=20 2 billions invested in the pipeline.=20 =01&On top of that, there have been a number of general terms and condition= s to=20 the services which have been made more clear to the market", highlights=20 Gross. Enron, however, has not succeed with respect to pricing the=20 transportation tariff in the agreement which has been fixed to US$ 1,15 per= =20 million of BTUs (British thermal units). At the end of last year, when the= =20 negotiations started, the company was asking for a tariff with a 25% discou= nt=20 rate, as it referred to an interruptible service, i.e, services that use=20 capacity already paid but not taken by third parties. Such services can be interrupted by the carrier, namely TBG, in the event t= he=20 company that has contracted the capacity in first place decides to increase= =20 the volume to be transported. "It is a lower quality service, which is wh= y=20 we requested a lower price", explains the officer. ANP, however, has=20 understood that since the volume transported through Gasbol is still very= =20 far from full capacity, the transport would not in fact be interrupted,=20 incorporating thus the features of non-interruptible service. "We=20 understand, however that, as the market develops, the tariff for the=20 interruptible services will tend to fall", he states.
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