Message-ID: <1114252.1075843916268.JavaMail.evans@thyme> Date: Wed, 1 Nov 2000 05:42:00 -0800 (PST) From: robert.williams@enron.com To: john.nowlan@enron.com Subject: Re: First Gas Cc: mike.mcconnell@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: mike.mcconnell@enron.com X-From: Robert C Williams X-To: John L Nowlan X-cc: Mike McConnell X-bcc: X-Folder: \Mark_McConnell_June2001\Notes Folders\All documents X-Origin: MCCONNELL-M X-FileName: mmcconn.nsf 6.1 says when FG becomes aware of changes it "shall" (so its mandatory) inform us "as soon as practicable" after it becomes aware. But then it says these are "good faith estimates" and are not to give rise to any liability on FG. These two provisions seem inconsistent to me. I think we should demand that FG pay. Our odds of winning on the point in arbitration are 50/50 (would hinge on what was parties' intent as reflected in negotiations). John L Nowlan@ECT 11/01/2000 08:34 AM To: Robert C Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mike McConnell/HOU/ECT@ECT cc: Mike Brown Subject: Re: First Gas Comments from John in singapore. raises this issue that they give us their requirements and we MUSTmeet their requirements. On the other hand if their requirements change we are responsible for demurrage , reselling or any other actions which must be taken . Bob is this your understanding, or once they give us their requirements they are responsible for costs incurred for any changes due to a change in their requirements? ---------------------- Forwarded by John L Nowlan/HOU/ECT on 11/01/2000 08:30 AM --------------------------- John Chismar 10/31/2000 08:38 PM To: John L Nowlan/HOU/ECT@ECT cc: Subject: Re: First Gas This is good news to me. Hope that Siemen's does come thru and then we can force the issue with FGH and show that they are being unreasonable in their demand on the specs we currently have. As to next delivery, the cargo just left ytdy and will arrive Batangas on the 7th. Sample of the shore tanks prior to loading was flown to Sing and tested using Ashing. Metals and everything was OK. We were rerunning last night using direct injection. Haven't seen those results yet. As to storage issue. Yes, we have seen some correspondence from FGH saying that the cargo would not fit. Expect that it should just become an issue over demurrage liability - ours vs FGH . However, you never know with this John Russel guy - if the mkt were to fall away he could try to say he wants a different price on the balance of the cargo. Expect it to price out at close to $35/bbl. We loaded minimum volume so a bit of a hit on frt. As of ytdy it looked like the ullage was going to be short by 8 to 15kbbls. If so we will be liable for demurrage. Another point of interest on this one is in all their forecasts they show usage everyday during the week. However, ytdy we hear from the Plant that they expect minimum usage (possibly zero) over the next two days due to religious holidays - All Saints. If so then the we will probably go to about 30kbbls short of ullage and demmurage will increase from a possible 4 days to 8 days @ $23k/day. Could this be construed as possible false info? John John L Nowlan 31/10/2000 21:20 To: John Chismar/SIN/ECT@ECT cc: Subject: First Gas John, think you should be aware of this. Any comments? ---------------------- Forwarded by John L Nowlan/HOU/ECT on 10/31/2000 07:19 AM --------------------------- Mike McConnell 10/30/2000 11:28 PM To: Jeffrey A Shankman/HOU/ECT@ECT, John L Nowlan/HOU/ECT@ECT cc: Subject: First Gas FYI. m ---------------------- Forwarded by Mike McConnell/HOU/ECT on 10/30/2000 11:32 PM --------------------------- Robert C Williams@ENRON_DEVELOPMENT 10/30/2000 01:40 PM To: Mike McConnell/HOU/ECT@ECT cc: Subject: First Gas Privileged and Confidential Attorney-Client Communication Mike Brown, David Terlip, Janice Moore and I met today. Plan is for Mike to get an answer from Siemens (probably this week or next) on spec. If Siemens amenable to relax First Gas' spec to plant, request First Gas to relax it's spec to us. Mike will report to you as soon as he has heard from Siemens. If either Siemens or First Gas recalcitrant, move to litigation strategy. This would mean at next cargo delivery (due mid-November): (1) if cargo "off spec" demand separate test using "ashing" technique (more likely to pass) and if it passes using "ashing" declare on spec and arbitrate dispute over acceptance of "ashing" as industry standard; (2) if cargo rejected (either because First Gas refuses to accept "ashing" or because off spec even with "ashing") resale cargo and force First Gas to locate alternative supplies; dispute First Gas invoice for cost of cover. Mike mentioned a possible dispute over storage which could also arise with the next delivery. This could bring us into a dispute with First Gas even if the cargo is on spec. Our plan is to get back to you in any event next week when you return with a status report. Please let me know if you have any questions. Cheers. And congratulations on the Sooners' win.