Message-ID: <2559405.1075840510831.JavaMail.evans@thyme> Date: Thu, 6 Jun 2002 07:11:43 -0700 (PDT) From: chris.germany@enron.com To: garrick.hill@enron.com Subject: FW: ponderosa plant service events for gas days june 4, 5, 6 Cc: robin.barbe@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable Bcc: robin.barbe@enron.com X-From: Germany, Chris X-To: Hill, Garrick X-cc: Barbe, Robin X-bcc: X-Folder: \ExMerge - Germany, Chris\Sent Items X-Origin: GERMANY-C X-FileName: chris germany 6-25-02.pst -----Original Message----- From: =09McMichael Jr., Ed =20 Sent:=09Thursday, June 06, 2002 9:03 AM To:=09Schneider, Chip; Sharp, Greg; McConnell, Mike Cc:=09Barbe, Robin; Germany, Chris; Miller, Don (Asset Mktg); Darmitzel, Pa= ul Subject:=09FW: ponderosa plant service events for gas days june 4, 5, 6 I do not know which, if any, of you guys is the right one to note this, but= I wanted to forward for the appropriate person's attention. If not you, c= ould you please advise me of the right Enron person. That said, I recommend that the person within Enron responsible for this de= al make sure that liability to Enron under the fuel management deal be ful= ly understood. We are doing what we can to minimize penalties or costs, bu= t we are quite limited in options due to the bankruptcy. Please let me kno= w your thoughts. Regards, Ed =09 -----Original Message----- From: =09Barbe, Robin =20 Sent:=09Wednesday, June 05, 2002 4:11 PM To:=09Brady, Kevin; Mazowita, Mike Cc:=09Germany, Chris; McMichael Jr., Ed; Barbe, Robin Subject:=09ponderosa plant service events for gas days june 4, 5, 6 Below is a summary of events over the last couple of days. I hope we don't= need. =20 Events of June 3 Gas service to the plant has been challenging. Lonestar Pipeline is runnin= g a pig for June 4,5,&6. Lonestar told us that roughly 60% would be cut. A= pparently Friday, May 31, Kevin communicated to his scheduling counterparti= es the maintenance information. He also indicated that our Lonestar=09rep = said the only safe scheduling points for the gas to come into their system = was Lonestar-Carthage and Lonestar-Katy Plant. Neither of the plant's supp= liers -Apache/Cinergy or Williams provided gas at those points for gas day = June 4. Cuts did occur as we were warned. Of the total nomination of 45M= M, 17.1 MM flowed for today's gas flow. The supplier breakout is Apache/Ci= nergy -20MM and Williams-25MM. Yesterday, Jeff Smiron at Lonestar said t= hey would allow the plant to pull from their imbalance account for today's = flow but they we had to have flowing gas for June 5 & 6.=20 I communicated the situation to Mike Mazowita at White Pines on June 3. I = also inquired about alternative fuel capability as a back-up. The plant ca= n burn No.6 low sulfur fuel oil. Mike indicated that the plant would not w= ant to do that and hadn't burned oil in quite some time. I told Mike that = I would use the possibility of alternative fuel replacement costs as levera= ge with the suppliers. He inquired if I knew how Lonestar would cut back t= he plant. I told him that I =09wasn't familiar with Lonestar specifically = but based on my experiences in gas control from a previous life that for a = plant of it's size they probably have remote control capabilities. If not = they would sent a field worker out to the meter station to adjust the valve= . The Apache and Williams supply contracts mirror each other in language. Th= e way I interrupt the contract language is that the supplier has the right = to choose the supply point/points into Lonestar's system from a list of pri= mary or secondary points in Exhibit A. If the plant's transportation contr= act gets interrupted then the supplier has the obligation to deliver gas in= to Lonestar's system at a location that will flow on the plant's transporta= tion agreement. If the supplier shorts theplant then the supplier is oblig= ated to pay for replacement costs for either gas or alternate fuels. Yeste= rday, I communicated my interpretation of the agreements to Frank Fields at= Williams and to Michelle Morgan and her boss Tom Strickland at Cinergy. T= om indicated that there had been an amendment and I told him I didn't have = a copy of the amendment. Sounds like the amendment may have changed some = of the delivery points. I told Tom at Cinergy that =09my primary concern w= as flowing gas supply to the plant. Tom was suggesting that this may be a = force majuere event. I told him I didn't interpret=09the force majuere lan= guage that way. The force majuere language addresses freeze-offs and line = breaks but not maintenance. I also told him that the contract has a provis= ion for transportation interruption. =20 In any case I told Tom time was of the essence and I was focusing on the op= erational issues and not monetary issues. I told him we could address the = =09financial resolution per the contract after the event was over. I told = him that the financial resolution of replacement gas for three days was min= imal in comparison to any potential damages incurred by the plant due to th= e pipe cutting back their gas supply.=20 =20 Events of June 4 This morning I spoke with Michelle Morgan at Cinergy. They are supplying 1= 2.9MM at Aquila-Katy into Lonestar for June 5. Williams is buying 10MM at = Carthage and 5MM at HLPL for June 5. Per Lonestar this should be OK for Ju= ne 5. Michelle had said she would pay back the shorted volume from June 4 = after the pigging was completed. They will pay back the volume ratably fo= r the remainder or in a day. =20 Russ Brown at Lonestar contacted Kevin around 12:30 to say the plant needed= to cut back to the 17.1MM flowing gas volume for today. The plant's burn = rate was causing the pig to run to fast. Russ is the manager of the transp= ortation administration department at Lonestar. I called Russ back at 1:10= pm to inquire about the problem. I asked him to call gas control and see w= hen the pig run would be over and to see if there was a point that we could= bring gas in intraday to help alleviate the problem. I also called Mike = to inform him of the new events. Russ called back and said the run would b= e over at 12:00pm tonight and that the only interconnect location that coul= d help was El Paso Field Services-Ennis. He also indicated that the pressu= re had stabilized and the plant may be able to make it through the run without the incremental gas. I called Cinergy a= nd Williams to see if they could make gas available intraday at the point. = Frank at Williams said they could not and Michelle at Cinergy said she wou= ld let me know. At 3:30 Michelle indicated that they could buy the gas and= the cost would be $0.95 to $1.00 more than the contract price. She said t= hat they didn't think Apache was liable for the costs because the requested= meter is not on the delivery point lists in the contract. They would buy = the gas if we would agree to pay the price. I called Mike at White Pines a= nd ask him what he wanted to do. He indicated that he wanted us me to buy = the gas. I called Russ to get an update and see if we could still do the n= om. Russ said the plant was burning more. Now they were burning 48MM and = requested they cut back to their nominated volume of 45MM. I told Russ I d= idn't think that they could be I would call. Mike confirmed that they coul= d not. He said had already called Brazos to see if they could back off eve= n 20 to 30 MW. He said Brazos is "playing chicken" and are requesting ever= ything they have. I told him I would call Cinergy and see if I could get = them to nominate the gas and agreed to settle the financial side per the co= ntract after the pigging event is completed. I called Michelle with my pro= posal and she said she needed to talk to Apache and would call me back. We= agreed to nominate the intraday gas and work out the financial part after = the event was over. Michelle called back and said the gas was going to com= e from storage and due to pressure problems the gas could not be delivered.= =20 Events of June 5 The plant made it through the June 4 gas day on gas. I spoke with Michelle= and she indicated that they were planning on serving gas day June 6 the sa= me as June 5. She said that Apache didn't think they were liable to make u= p the gas they shorted us for June 4. She said I could talk with Pat Green= at Apache regarding the issue. Williams moved their gas from Carthage to = HPL for June 6. I left a message for Russ at Lonestar to check on the poin= t. I requested that =09Kevin do the same with his Lonestar contact. Neith= er of us has had a return call from our corresponding Lonestar counterparti= es. We will have to address the =09issue intraday if necessary. =09 I will keep everyone posted of any new developments.