Message-ID: <32687926.1075845933789.JavaMail.evans@thyme> Date: Fri, 1 Sep 2000 08:41:00 -0700 (PDT) From: kay.mann@enron.com To: ozzie.pagan@enron.com, ben.jacoby@enron.com, heather.kroll@enron.com, reagan.rorschach@enron.com Subject: Re: Report on Damage of the Generator for the CALME Gas Turbine Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Kay Mann X-To: Ozzie Pagan, Ben Jacoby, Heather Kroll, Reagan Rorschach X-cc: X-bcc: X-Folder: \Kay_Mann_June2001_3\Notes Folders\Sent X-Origin: MANN-K X-FileName: kmann.nsf FYI ---------------------- Forwarded by Kay Mann/Corp/Enron on 09/01/2000 03:40 PM --------------------------- Cheryl Costa@ENRON_DEVELOPMENT 09/01/2000 01:52 PM To: Kay Mann@ENRON cc: Subject: Re: Report on Damage of the Generator for the CALME Gas Turbine Hi Kay, this info should help you... Cheryl ---------------------- Forwarded by Cheryl Costa/ENRON_DEVELOPMENT on 09/01/2000 01:52 PM --------------------------- Matthew Tezyk 08/25/2000 05:56 PM To: Hemmat Safwat/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Dan Shultz/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sam Habash/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dwight Alexander/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Cheryl Costa/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Re: Report on Damage of the Generator for the CALME Gas Turbine Hemmat, In answer to your first question; yes, I am the Project Manager currently handling the Westinghouse 501D5A that is due to be complete in September 2000. I was assigned to the project in late June 2000 and do not have any inspection, shipping / receipts, or etc. at this time. I do have a QA/QC inspector on this project to ensure Enron and CALME get a quality turbine for their money. I am also working on an AFE to cover the expenses of this work from July 2000 until the turbine is turned over to a dedicated project site. This cost will include proper storage of the GTG and inspections so we do not have another debacle like the Iuka, MS frame 6B's. At the present, I anticipate the cost to be from $50,000 to $75,000 till the end of this year. Any money left over will be carried over into the following year or rebated when the turbine is turned over to a dedicated project site (i.e. CALME will only need to cover what is actually spent). The only deviation to the contract that I am aware of is the change order for the duel fuel option. I believe that other changes are being negotiated, but I am unaware of the content of those changes, if any, at this time. To begin the summary, the gas turbine is in the Houston, Texas Powerserve shop going through final assembly. The turbine is expected to ship to the delivery point (Port of Houston) by mid to late September, 2000. The generator is a different story. It was shipped from Nasan, South Korea on 8 JUN 00. It arrived in the Port of Houston on or about 23 JUL 00. As the cargo ship was off-loading it's cargo, the ship listed to one side. The crew went to re-balast the ship; however they did not close certain valves, or something to that effect, and flooded the cargo bay containing our generator. When the mistake was realized, 19 inches of seawater was in and around the generator. The water touched the parallel rings but not the core of the generator. Talking with Lynn DeKrey, Westinghouse Project Manager, he informed us that Westinghouse engineering has declared the generator non-salvageable. Lynn is currently gathering information so we can claim an insurable event occurred as well as trying to find us a generator as soon as possible. Lynn is also going to send an accident report so we may evaluate the damage as well. We have not accepted delivery of the generator and turbine; furthermore, title has not been transferred to Enron. I have alerted Dan Shultz, Brian Barto, and Dwight Alexander of these events. In short, the Westinghouse 501D5A WILL NOT be available, as a GTG set, in September 2000. Options to repair the generator were discussed with Lynn and it is estimated to take anywhere from six to twelve months and cost $3.5 to $5 million dollars. The next option is to take delivery of an Erferd generator from Germany in late July, 2001. The last option, which Lynn is currently working, is to supply a generator in sufficient time for a Commercial Operation Date of June 1, 2000. If you have any questions, or would like me to speak with you further on this, please feel free to contact me at 713-646-8258. Sincerely, Matthew Tezyk Project Manager Hemmat Safwat 08/25/2000 07:07 AM To: Matthew Tezyk/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Dan Shultz/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Dwight Alexander/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Cheryl Costa/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Sam Habash/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Report on Damage of the Generator for the CALME Gas Turbine Project: Sadaf Doc. Nbr.: Matt: I understand that you have been following the order of the CALME gas turbine with Siemens Westinghouse. Please summarize for us the status of inspections, shipments of the order. What took place what remains (where and when). Are you the custodian of the various inspection, shipping / receipts etc. What deviations if any from the Contract. I would appreciate it if you can address specifically what is the situation with the Generator, we understand that while it was being unloaded in the Houston port, it encountered some damage. Please indicate what is the damage, and what is the steps that is now in place to fix the problem. again who is doing what. Are we still on target that the complete GTG will be in storage by September 2000. Regards, Hemmat Safwat