Message-ID: <27506049.1075859087838.JavaMail.evans@thyme> Date: Sun, 9 Dec 2001 15:09:44 -0800 (PST) From: robert.hill@enron.com To: danny.mccarty@enron.com Subject: FW: ANGTS Commercial Proposal - STRICTLY CONFIDENTIAL Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Hill, Robert X-To: McCarty, Danny X-cc: X-bcc: X-Folder: \Danny_McCarty_Jan2002\McCarty, Danny\Inbox\Alaska Gas X-Origin: McCarty-D X-FileName: dmccarty (Non-Privileged).pst Attached you will find the latest draft of the proposal executive summary. Bob Hill -----Original Message----- From: Bruce Scott [mailto:BScott@wei.org] Sent: Thursday, December 06, 2001 6:59 PM To: 'skschroeder@duke-energy.com'; 'bdreese@duke-energy.com'; 'byron.wright@elpaso.com'; 'jay.holm@elpaso.com'; 'james.flynn@elpaso.com'; Gadd, Eric; Hill, Robert; Reinecke, Bryan; 'marty.heeg@foothillspipe.com'; 'andrew.ilnycky@foothillspipe.com'; 'rob.cohen@foothillspipe.com'; 'dpentzien@nisource.com'; 'peter.lund@neg.pge.com'; 'dave.vandriel@neg.pge.com'; 'lauri.newton@neg.pge.com'; 'wpurcell@sempra-intl.com'; 'spatrick@sempra.com'; 'tony_palmer@transcanada.com'; 'donna_friesen@transcanada.com'; 'cavan.c.carlton@williams.com'; 'jim.c.moore@williams.com'; 'peter.c.thomas@williams.com'; Murray Birch; Bob Bissett; John Taylor Subject: ANGTS Commercial Proposal - STRICTLY CONFIDENTIAL At yesterday's meeting of the ANGTS Commercial Team, it was agreed that Dave, Cavan and I would continue to work together to modify the commercial proposal's executive summary over the next two weeks so it can be sent to the ANS producers on the Friday just before Xmas. In advance of next week's meeting in LA, we will incorporate comments made yesterday (some of which are listed below) as well as any points conveyed to us by the close of business tomorrow. Attached is the exact same version of the document discussed yesterday (in case you did not receive the soft copy the previous evening). Please feel free to provide your comments by e-mail. <> * ANS producers want a pipeline capable of transporting 4.0 to 5.5 bcf/d; 4.0 to 4.5 bcf/d initial volume at Prudhoe Bay. * Provide a basket of pipeline design options; namely, a 42-inch, 2,050 psig line capable of transporting 2.5 to 5.3 bcf/d (loop sections being necessary to achieve volumes above 4.0 bcf/d) and a 48-inch, 2,050 psig line capable of transporting 3.1 to 5.3 bcf/d; also provide the lowest per unit cost means of transporting gas to market. * Indicate how fuel consumption will impact the optimum pipe platform, assuming a fuel cost of US$0.75/MMBtu. * Provide a range of traditional cost-of-service tolls that includes historic costs (US$385 mm total) and provides for 14% ROE; consider including capital cost per decatherm of throughput capacity; tolls will not be a binding offer. * Emphasize that the ANGTS "B-to-C" strategy is consistent with NPA and ANGTA. * Describe each "asset" (certificates, permits, legislation, etc.) underpinning the ANGTS timing advantage; reduces risk and increases certainty. * Provide an estimate of the value of the ANGTS timing advantage. * Address specific strategies for dealing with each contingent liability on the theory that used and useful capital will be credited at start up. * Express a willingness to discuss producer equity participation and risk sharing. Bruce Scott Office: 403-699-1415 Cell: 403-862-0706