Subject: Re: Japanese Crude Cocktail & Prompt Brent
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Fri, 13 Oct 2000 09:16:00 -0700 (PDT)

Vince
Marc and I spoke about the JCC Brent relationship. I don't know enough about 
JCC to have a view if putting JCC on EOL is a good idea. Would be interested 
to know the realtionship to Brent and learn more about it. Also spoke to John 
Chismar about JCC. It sounds pretty non-liquid acc. to John.

Let me know if there is something we can do.

regards
chris glaas    

   
	Enron Capital & Trade Resources Corp.
	
	From:  Marc De La Roche                           13/10/2000 13:18

To: Chris Glaas/LON/ECT@ECT
cc: Doug Leach/HOU/ECT@ECT, Kevin Kindall/Corp/Enron@ENRON 

Subject: Re: Japanese Crude Cocktail & Prompt Brent  

	

Chris,

Thanks for the response. The comment about hedgeing JCC with Brent is right 
on if the exercise is to hedge our own LNG positions that we have tieds to 
JCC. Note that the high JCC correlation to Prompt Brent is not something that 
is obvious to non-Enron LNG-tied-to-JCC buyers. If you are an LNG-tied-to-JCC 
buyer, and you wish to hedge your purchases, wouldn't you want to be able to 
transact ona a JCC contract? My objective is to have a JCC contract on EOL, 
whereby we, Enron, take the JCC/Brent risk (which is why we asked Vince 
Kaminski's group to study the relationship and give us a hedge ratio to use). 
I'm attaching a model used to calculate JCC for Dabhol Power Co.'s Adgas and 
Oman LNG contracts. Basically what happens is that all the "raw oil" volumes 
imported into Japan and added up and the total price is divide by the total 
volume, and there is a Yen/US$ foreighn exchange component as well. That is 
JCC. It was designed by the Japanese so that they could tie their LNG imports 
to their average price of crude imports whereby the LNG would be cheaper on 
an MMBTU basis.

Comments?

Brgds,

Marc

Chris Glaas
10/13/2000 03:11 AM
To: Marc De La Roche/HOU/ECT@ECT
cc:  
Subject: Re: Japanese Crude Cocktail & Prompt Brent  

Marc

regarding putting JCC on EOL I get a negative respons from our Sing office. 
It is not a very liquid market. Everyone is going the same way.
I understand there is good correlation between Brent and JCC. I know little 
about JCC, but if there is good correlation u should be able to hedge 
yourself with Brent. I need to know more about how JCC works in order to help 
u, if u require any help at all?

Let me know
chris glaas 

   
	Enron Capital & Trade Resources Corp.
	
	From:  Marc De La Roche                           10/11/2000 03:16 PM

To: Chris Glaas/LON/ECT@ECT
cc: Doug Leach/HOU/ECT@ECT, Larry Gagliardi/Corp/Enron@Enron 

Subject: Japanese Crude Cocktail & Prompt Brent

	

Chris,

Some of EGM's LNG Group's LNG is priced using a JCC-based formula. There's 
also a lot of other LNG contracts that use JCC as the pricing basis. In June 
we obtained sign-off from Vince Kaminski's group to hedge JCC using Prompt 
Brent (see the messages with the relevant hedge ratio below). Can we set up a 
contract on EOL, using the Prompt Brent-JCC hedge ratio, to hedge JCC? 

FYI, on a BTU conversion basis:

Therefore, to hedge 1000 MT of LNG, a customer would need to transact on a 
hedge for 9000 BBL of JCC. Can we list a JCC swap in 9000 BBL/month 
increments?

Thanks in advance,

Marc
---------------------- Forwarded by Marc De La Roche/HOU/ECT on 10/11/2000 
08:32 AM ---------------------------

Kevin Kindall@ENRON
06/06/2000 03:47 PM
To: Marc De La Roche/HOU/ECT@ECT
cc:  
Subject: Re: JCC & Brent  

Yes on both counts.

-Kevin K.

   

	From:  Marc De La Roche @ ECT                           06/06/2000 02:50 PM

To: Kevin Kindall/Corp/Enron@ENRON
cc: Grant Masson/HOU/ECT@ECT, Vince J Kaminski/HOU/ECT@ECT 

Subject: Re: JCC & Brent  

	

Kevin,

Thanks for the information. For avoidance of doubt, please confirm:

That the  relationship means that to hedge ten thousand barrels of JCC in 
September '00, I would have to enter into a financial transaction for 6706 
barrels of Prompt (August) Brent, and;

That this email constitutes your groups (Vince Kaminski's) sign-off on using 
this hedge ratio to hedge JCC and JCC-based products?

Thanks in advance,

Marc de La Roche

Kevin Kindall@ENRON
06/06/2000 02:18 PM
To: Marc De La Roche/HOU/ECT@ECT
cc: Grant Masson/HOU/ECT@ECT 
Subject: Re: JCC & Brent  

 Good afternoon.  I have performed a review of the JCC data that you sent 
some time ago.  The study was done using several different Excel workbooks, 
and are available upon request.  Relevant charts are embedded in the 
Powerpoint attachment.  Questions/comments welcome.

-Kevin Kindall