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---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 10/24/2000 01:47 PM --------------------------- Ross Koller 10/24/2000 11:46 AM To: Jeffrey A Shankman/HOU/ECT@ECT cc: Subject: gdansk refinery fyi ---------------------- Forwarded by Ross Koller/LON/ECT on 24/10/2000 17:47 --------------------------- Ross Koller 24/10/2000 10:29 To: Chris Mahoney/LON/ECT@ECT, Tony O'Brien/LON/ECT@ECT, Henkka Talvitie/LON/ECT@ECT, John Spencer/EU/Enron@Enron, Chris Glaas/LON/ECT@ECT, Niamh Clarke/LON/ECT@ECT, Scott Moncrieff/LON/ECT@ECT, Graham Cane/LON/ECT@ECT, John L Nowlan/HOU/ECT@ECT cc: Subject: gdansk refinery was asked into a meeting yesterday regarding the eventual purchase of 15-25% of the gdansk refinery. enron has been approached by the polish govt (and the main russian crude supplier JNS) to participate in this privatisation. i have copies of the brief for all of you. further background is that JNS (a smaller russian crude supplier) has 85% of the contracts into that refinery (and the Plock refinery), and controls the Druzbha pipeline. they want us to b involved as the headline western company. (the Plock ref people and the JNS people wud like to buy the thing but for political reasons cannot until about 5 years down the road.) Therefore, we can structure our deal w/ a put option for a later date. We can view this as a long crack position, with an eventual put in place if/when we don't like the deal. There are other optionality benefits that need to be assessed. (so far i have told them to count the trading angle as 0 profit, so that they don't load us up w/ a lot of bs). We can use the facilities as a terminal. We can just use the infrastructure to re-sell the crude that they get on the pipeline. We can sell the ulsd they make and replace w/ regular diesel. Given their power needs they have their own plant but are still short 300 MW, so the power people like it. etc etc. I have already told them that we did not really want to waste our time thinking about this project if the specter of a reuters headline blaring that 'Enron Buys Polish Refinery' is going to kill the deal from Skilling's perspective. they assure me that they have run it by sheriff and he likes the power aspect and the higher profile this wud give us in poland so he is favorable towards it, for the moment. rac will be looking for 20-25% roi, which may kill the whole thing anyway. they have already gotten toxic waste indemnity from the govt. we need to ask questions/poke holes and get as much information as possible out of the govt and JNS, because either they will do the deal and throw this in our laps, or they might pass on something that wud actually turn out to be interesting. if everybody wud please read the brief and come up w/ issues to be clarified by wednesday next week, i would appreciate it. thx
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