Re:

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---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 10/02/2000
02:27 PM ---------------------------

Rick Bergsieker@ENRON_DEVELOPMENT
09/23/2000 08:34 AM
To: Jeffrey A Shankman/HOU/ECT@ECT
cc:
Subject: Re:

Bobby retires this month, but will continue as a consultant to Enron India.
His stated intention is to shadow Clay and his team to help arrange LNG
supplies for Metgas. We do not need this and it adds a layer of confusion
whenever he is in attendance in negotiations, but to date neither Wade nor
Sanjay has been willing or able to control this. The India group tends to
blame their failure to market Metgas supplies on the LNG team's "failure" to
get better terms, and they insist that Bobby or others attend the meetings to
ensure that we are doing a good job.

We believe that we have obtained LNG for Metgas on favorable terms,
particularly in light of the fact that we have convinced Malaysia and Abu
Dhabi to accept the credit risk of Metgas customers, i.e., with no Ennron
support in the middle and no Indian government support behind the buyers).
They believe that our supplies are priced 50 cents above the "market", which
they perceive to be Qatari supplies to Petronet ( a proposed
government-backed LNG import project in Western India that is a long way from
being real).

We believe that we know the pricing terms for the proposed Petronet deal and
that the price is not as low as rumored. We also believe that the Metgas
customers are willing to pay the price that we have negotiated and that the
Metgas pipeline economics are sound (although the India group has been
unwilling to share their economics with us) and that, once the LNG contracts
are in place, we can reduce the LNG price significantly via a backhaul from
Malaysia using ADGAS/TEPCO ships. We can further reduce the price if we can
get access to the spare capacity on the ship dedicated to DPC and use it to
move incremental cargoes from Abu Dhabi to Metgas.

Bobby and his team want us to reopen the price in the Mayasia term sheet. We
do not intend to do this. Malaysia has told us that they will walk the deal
if we insist on a lower price. Malaysia recently sold additional volumes to
Japan for a price about 20 cents higher than the price to Metgas and they
believe they can also sell our volumes at a higher price to more creditworthy
buyers in the far east.

The Malaysia COI includes a cp that Metgas will finalize contracts with its
end buyers by Sep 1999. We have repeatedly gotten Malaysia to extend this
target date, which is now end October 2000, but Malaysia is getting impatient
with India and I am not sure how much longer we can hold this together
without some more firm evidence from India that the markets are real

I will be in India on Oct 4/5 to meet with Sanjay and Wade to discuss this.
We will also try to finalize the terms for us to provide LNG fuel management
and shipping services to both DPC and Metgas, and will seek clarification
from Wade/Sanjay as to how they intend to sell down DPC/Metgas without losing
control of the LNG terminal. Clay, V V RAo and Wayne Perry will be with me.

Working with India is never easy

Rick

From: Jeffrey A Shankman @ ECT 09/22/2000 04:44 PM

To: Rick Bergsieker/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:

Subject:

I'm hearing a little noise about Bobby Ferris in Sanjay's group. Did he
retire or not? Bobby's job is not going to one soley in which he directs the
LNG team to source product for metgas. What's the story?

Jeff