Good summary of Canadian process.

Once George, Bob and I meet, I will give the group and update.

thansk

bob
---------------------- Forwarded by Bob M Hall/NA/Enron on 04/02/2001 03:47 PM ---------------------------
   
	  From:  George F Smith @ ECT                           04/02/2001 02:34 PM	
		


To:	Robert Superty/HOU/ECT@ECT, Bob M Hall/NA/Enron@Enron
cc:	 

Subject:	Canadian Outsourcing Deals

I met with Peggy Hedstrom and to some extent with Laura Scott  in Calgary regarding how they handle the day to day activity of their producer outsourcing deals.


The producer provides to EC their projected production schedule for the year by month by plant outlet. This information is entered into Sitara by EC on a single ticket with no meter information. For the prompt month EC confirms back to the producer their expected production volumes by point by day. This includes any maintenance or scheduled down time that would affect their daily flows. This information is contained within a Excel spreadsheet which can be viewed by the producer via a common network drive.

The producer communicates to EC their sales for the month and on a daily basis. EC enters these trades in Sitara. The Sitara position by producer is balanced to zero daily. The producer does not have access to Sitara.

EC acts as agent for the downstream transportation owned by producer. They have no diversion rights on this transport, it is utilised at the direction of the producer. EC nominates producers transport. All transport expense estimates are maintained by EC. EC is invoiced and pays the pipeline.

EC monitors estimated hourly flows from the plant outlets as provided by Nova. It is the responsibility of EC to inform the producer of significant variances in their scheduled versus estimated flows. Nova requires that shippers be balanced on a daily basis or face penalties if variances are out of tolerance. It is EC's responsibility to keep the producer out of penalty situations. The producer, at the direction of EC, either sells or buys on an intraday basis to balance their position on the pipeline. Final estimated flows are then downloaded by EC into the Excel spreadsheet. This final estimate is than used as the expected volume for the upcoming day.  And Sitara is updated accordingly.

At months end the spreadsheet information is transferred to an accounting system referred to as Solomon. Actual volumes as provided by the pipeline are also entered into the system for settlement. I didn't have a lot of time to devote to the accounting process, but I doubt ENA would take this approach.

EC utilises a single point of contact with each producer from a logistics and origination standpoint. Peggy said they did not hire people specifically from the producer/customers but did seek out people with extensive producer experience to assist with these customers. Peggy feels that their success is due in a large part to the very strong relationships they have developed with their customers through this point of contact approach.

It is of note that Unify is not utilised in managing these customers business. Peggy feels that Unify is not  designed to handle it and response time is too slow for their purposes given the time constraints they are working under on a daily basis.