Subject: TW Mainline Expansion
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Tue, 30 Jan 2001 20:43:00 -0800 (PST)

The attached files are the analysis of Option 1 and Option 2 for the TW Expansion.  The analysis for Option 2 was not adjusted for the lost revenue, but the attached file reflects the range of revenue that will be impacted by the overhauls of the existing units.  The following assumption were used for each option.
If you need to print the analysis for 140 or 150 expansion, you only need to print the first 8 pages of the workbook.

Option #1 - Install RB211 at Station #1 thru #4

Volume:  150 MMcf/day
Transport Rate Used: $.3677
Capital Investments: $99.6MM
Capital Estimate:+-10%
Operating Cost of Existing Units: $85/HP
Btu/HPHR: 7000
Operating Cost of New Units: $35/HP
Btu/HPHR: 7300
Design Rated HP: 152,000HP
Site Rated HP: 99,100
Required HP: 80,150
Incremental HP: 30650
Retainage: 5%
Load Factor: 85% Mean Average - Standard Deviation = 5%
Existing Units will be abandon in place.
Ad Valorem Tax will be the same for either option.

Option #2 - Install Nuovo Pignones at Station #1 thru #4

Volume:  140 MMcf/day
Transport Rate Used: $.3677
Capital Investments: $68,8MM
Capital Estimate:+-10%
Operating Cost of Existing Units: $85/HP
Btu/HPHR: 7000
Operating Cost of New Units: $35/HP
Btu/HPHR: 8000
Design Rated HP: 62,800HP
Site Rated HP: 41,200
Required HP: 30,000
Retainage: 5%
Load Factor: 85% Mean Average - Standard Deviation = 5%
Ad Valorem Tax will be the same for either option.
Overhaul Revenue Lost Range  for 90 Days of downtime ($1.6MM to $3.9MM) Note: Not included in IRR!

Option #1 IRR (13.46%) and Option #2 IRR(15.86%).  Both project can be structured to fit current rate structure or a negotiated rate structure by adjusting O&M assumptions and debt/equity ratios.

I will be out of the office Wednesday afternoon thru Friday.  If you have any questions, please call me at Ext 35028 or at home 281-356-6089.