Subject: Diversion of Hoegh Galleon to Eco July 31
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Fri, 13 Jul 2001 09:40:40 -0700 (PDT)

Rick,

Some additional factors have come to light since our Wednesday decision to not divert the Hoegh Galleon to Eco at the end of July. I believe that these factors warrant continued consideration of the diversion.

1. A Cabot LNG cargo was nominated with a delivery window of August 18-22. The cargo can be cancelled with no penalty "up to 10 days prior to the middle day of its Delivery Window". Cabot should be notified as soon as possible if Eco chooses to cancel.

2. The delivery window of the Cabot cargo might be past the time that the FERC representatives planned to be in Puerto Rico. Victor Vega is checking with his contacts at the FERC to find out whether or not they will still be in Puerto Rico during the time the cargo will be unloaded.

3. Eco's upside is really greater than previously discussed. Let's say that Eco purchased the Hoegh Galleon cargo for $3.38/MMBtu. All of this LNG should be considered "excess LNG" for the year 2001. Eco could make a deal with PREPA that resulted in an 85-90% dispatch and PREPA could get a great "spot fuel price". Each $0.10/MMBtu that Eco is able to get from PREPA for dispatch above 76% means $200,000 of profit to Eco. A SPF of $3.98/MMBtu would be a $0.60/MMBtu margin on 2 TBtu or $1.2 MM.

Let's discuss.

Paul