Enron Mail

From:john.rigby@enron.com
To:john.ayres@enron.com, randy.pais@enron.com, dgohlke@skadden.com
Subject:Re: Who delivers LM6000s from GE Facility to Site
Cc:kay.mann@enron.com, armando.lucio@enron.com
Bcc:kay.mann@enron.com, armando.lucio@enron.com
Date:Tue, 8 May 2001 10:40:00 -0700 (PDT)

1.0 John A and Armando.

My question and John's response has led me down the following merry chase:

The LM6000 contract has GE keeping risk of loss and damage until delivery to
the Delivery Point. The Delivery Point is Jacinto Port. Without any other
documents, GE has delivered the equipment and Risk of Loss and Damage is
Brazilian Trust's. I understand that some deal was cut in a letter that Ben
Jacoby sent to GE where GE keeps the ROL while in storage, but there are some
storage costs.

(Note:) We have a very painful experience on a turbine from another vendor
where the point and time of transfer of risk of loss is a central issue to a
dispute at hand.)

I think we need clear documentation making it clear that GE has ROL for the
equipment until we take it out of storage.

As it relates to NEPCO if I understand it correctly the risk of loss chain is
as follows: GE delivers to the Jacinto port where Risk of loss transfers to
Brazilian Trust, Brazilian Trust delivers to the port and keeps risk of
loss until Ex Terra, at which point risk of loss under the Turbine Purchase
Agreement transfers to NEPCO, but under the EPC contract SFE assumes risk of
loss at ExTerra. Thus NEPCO does not have a risk of loss exposure.

I can see how NEPCO transports from Exterra to the Site under the EPC
contract and is protected by clause 8.1 of the EPC Contract.

Under what authority is NEPCO transporting the equipment from the GE
delivery point to Exterra, has Brazilian Trust engaged NEPCO to do so? The
Turbine Purchase Agreement does not contemplate this.

2.0 David Gohlke- I think we have a small hole that needs and can be easily
filled. In the Turbine Purchase Agreement, can we have NEPCO perform
transport service from the GE delivery point to Exterra but BT keeps ROL.

3.0 I think from a GE perspective, the Enron family takes ROL from GE at
Jacinto port and gets the turbines delivered to the Site.

4.0 Kay Mann - I really need a copy of the Ben letter- we start moving
equipment shortly- I need to make sure that the ROL issue with GE is
adequately covered.



John R Ayres@ENRON
05/08/2001 08:53 AM

To: John G Rigby/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Pamela K Blande/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Armando
Lucio/Enron@EnronXGate
Subject: Re: Who delivers from Houston to Brazil

John, call Pam Blande for the exact details. It is a custom broker by the
name of Fritz, but she will gladly give you the details. NEPCO via a
sub-contract moves the material out of the GE storage, to the ship, load on
the ship, ocean shipment, unloading at Sepitiba, transport to the site,
custom clearance, and then NEPCO unloads from the heavy hauller onto the pads.
Pam has all of the details.
John



John G Rigby@ENRON_DEVELOPMENT
05/07/2001 06:01 PM
To: John R Ayres/NA/Enron@Enron
cc:

Subject: Who delivers from Houston to Brazil

Who transports from Houston to Brazil, GE, SFE, Brazil Trust or NEPCO.
Have we elected the Option to have GE deliver to the Site?