Message-ID: <9129780.1075844047616.JavaMail.evans@thyme> Date: Fri, 4 Aug 2000 03:04:00 -0700 (PDT) From: lorna.brennan@enron.com To: john.goodpasture@enron.com, michael.ratner@enron.com, rockey.storie@enron.com, kent.miller@enron.com, john.dushinske@enron.com, dave.neubauer@enron.com, bill.fowler@enron.com, michael.bodnar@enron.com, joni.bollinger@enron.com, david.badura@enron.com, janet.bowers@enron.com, craig.buehler@enron.com, bob.burleson@enron.com, allen.cohrs@enron.com, john.fiscus@enron.com, steve.gilbert@enron.com, morgan.gottsponer@enron.com, stephen.herber@enron.com, dana.jones@enron.com, stephanie.korbelik@enron.com, bill.mangels@enron.com, penny.mccarran@enron.com, vernon.mercaldo@enron.com, larry.pavlou@enron.com, eileen.peebles@enron.com, tony.perry@enron.com, loren.penkava@enron.com, ken.powers@enron.com, chris.sebesta@enron.com, frank.semin@enron.com, neal.shaw@enron.com, larry.swett@enron.com, kay.threet@enron.com, mike.ullom@enron.com, lisa.valley@enron.com, chuck.wilkinson@enron.com, jim.wiltfong@enron.com, jo.williams@enron.com, karen.lagerstrom@enron.com, ray.stelly@enron.com, bob.stevens@enron.com, sue.neville@enron.com, mike.barry@enron.com, martha.janousek@enron.com, kimberly.watson@enron.com, don.powell@enron.com, steve.weller@enron.com, michael.stage@enron.com, tim.johanson@enron.com, laura.lantefield@enron.com, frank.oldenhuis@enron.com, jeff.nielsen@enron.com, tracy.schwartzkopf@enron.com, robert.mason@enron.com, sean.bolks@enron.com, miriam.martinez@enron.com, lee.ferrell@enron.com, john.williams@enron.com, reyna.cabrera@enron.com, mike.mcgowan@enron.com, steven.harris@enron.com, jeffery.fawcett@enron.com, lorraine.lindberg@enron.com, kevin.hyatt@enron.com, christine.stokes@enron.com, tk.lohman@enron.com, michelle.lokay@enron.com, lindy.donoho@enron.com Subject: InterGen Buys Part of Coral Energy Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Lorna Brennan X-To: John Goodpasture, Michael Ratner, Rockey Storie, Kent Miller, John Dushinske, Dave Neubauer, Bill Fowler, Michael Bodnar, Joni Bollinger, David Badura, Janet Bowers, Craig Buehler, Bob Burleson, Allen Cohrs, John Fiscus, Steve Gilbert, Morgan Gottsponer, Stephen Herber, Dana Jones, Stephanie Korbelik, Bill Mangels, Penny McCarran, Vernon Mercaldo, Larry Pavlou, Eileen Peebles, Tony Perry, Loren Penkava, Ken Powers, Chris Sebesta, Frank Semin, Neal Shaw, Larry Swett, Kay Threet, Mike Ullom, Lisa Valley, Chuck Wilkinson, Jim Wiltfong, Jo Williams, Karen Lagerstrom, Ray Stelly, Bob Stevens, Sue M Neville, Mike Barry, Martha Janousek, Kimberly Watson, Don Powell, Steve Weller, Michael G Stage, Tim Johanson, Laura Lantefield, Frank Oldenhuis, Jeff Nielsen, Tracy Schwartzkopf, Robert Mason, Sean Bolks, Miriam Martinez, Lee Ferrell, John Williams, Reyna Cabrera, Mike McGowan, Steven Harris, Jeffery Fawcett, Lorraine Lindberg, Kevin Hyatt, Christine Stokes, TK Lohman, Michelle Lokay, Lindy Donoho X-cc: X-bcc: X-Folder: \Michelle_Lokay_Dec2000_June2001_1\Notes Folders\Articles X-Origin: LOKAY-M X-FileName: mlokay.nsf InterGen Takes 30% Stake in Coral Energy With plans to grow its power generation portfolio in the United States, InterGen, the power generation joint venture of Royal Dutch/Shell Group and Bechtel Enterprise Holdings Inc., closed a deal yesterday giving the international developer a 30% equity interest in Houston-based Coral Energy, one of the largest natural gas and power marketers in the country. Coral Energy officials had predicted in July that Shell and construction giant Bechtel would fold InterGen, InterGen North America and certain assets of Coral Energy into one business (see Daily GPI, July 10). Under the agreement announced yesterday, InterGen will receive the majority of the natural gas pipeline, storage and power generation assets of Shell's Coral Energy affiliate in the United States. It remains a joint venture of Shell and Bechtel. The move gives Shell a 68% ownership in InterGen, with Bechtel owning the remaining 32%. InterGen had been formed as a 50/50 joint venture, and Bechtel made an undisclosed payment to Shell in the deal. About 230 Coral employees, mostly related to the Texas-based assets in Houston, will become InterGen employees under the agreement. InterGen is considered a world leader in power generation development, with projects around the world. Carlos Riva, InterGen's CEO, said that the transaction "represents a significant boost to our plans in the United States. These assets and strengthened alignment with a premier U.S. gas and electricity trading enterprise will provide InterGen a strong platform for growth in the U.S. market." Globally, the alignment is expected to help leverage Shell's strengths in both fuel supply and power marketing and trading. Bechtel will continue to be InterGen's preferred provider for worldwide power generation engineering, procurement and construction services. Coral is the region's third largest natural gas marketer and the twentieth largest power marketer in the country. Linda Cook, Shell Gas and Power's CEO, said the "whole idea" was to help InterGen grow in the United States, and that the best way was to add Shell assets to it. "Success in tomorrow's energy markets will be earned through globally aligned marketing, trading and asset companies," said Cook. "That's critically true in the U.S. and will be the case as competitive energy markets open worldwide. InterGen plans to build a sizable power generation portfolio in the U.S., working closely with Coral to pursue investment decisions that make the most commercial sense. We expect this relationship to make a significant contribution to both InterGen's and Coral's long-term success." Shell and Bechtel formed InterGen in March 1999 (see Daily GPI, March 18, 1999) specifically to pursue power generation opportunities in North America. The Boston-based company was set up to develop, "Shell, Bechtel and InterGen have among them the complete skill set for success in the new global energy market," said Paul Unruh, COO of Bechtel. "InterGen is a world-class developer with a proven track record of successfully developing, financing and operating projects around the world. Shell is one of the most successful marketers and traders of energy in the U.S. and is expanding into deregulating natural gas and power markets globally; Bechtel is a global leader in the development, engineering and construction of power facilities. These strengths together create a large power generation platform now directly linked with global energy marketing and trading." InterGen's portfolio will give Coral Energy access for its trading business, and Coral will participate as part of Shell's global trading network, with InterGen a business partner in its expanding North American asset platform. As the exclusive marketer of Shell's gas production, Coral has a gas supply of 2.5 Bcf/d, and a trading platform dealing in extensive volumes of energy in all key supply basins. For Bechtel, the agreement will help it lock in construction contracts for its combined cycle gas turbine power stations. Specifically, the assets to be transferred to InterGen from Coral include the following: 4,000 miles of major intrastate gas pipelines in Texas. The pipeline facilities extend from South Texas near the Mexican border along the Texas Gulf Coast to the Louisiana boarder, and north from near Houston to the East Texas producing areas. The West Clear Lake Storage facility, one of the largest natural gas storage reservoirs in Texas. Located near the Houston Ship Channel, it has a leasehold interest in the Stratton Ridge storage facility. Coral's interest of more than 500 MW in four power plants --- one in operation and three under construction. The transfer would follow equity and regulatory approvals. In total, Coral had 6,100 miles of gas pipeline that ran along the Gulf Coast in Texas and Louisiana. It also is building a 100-mile long pipeline in northern Mexico with that country's national oil company, PEMEX. Currently, InterGen is either operating or building 11 power stations with a total of 7,985 MW. It also has 7,040 MW in advanced development. Projects are being operated, under construction or are in advanced development in the United Kingdom, the Philippines, Colombia, Mexico, China, Egypt, Brazil, Australia, Turkey and the United States.