Thanks V V---I am forwarding this to Mike, Eric and Jonathan for their 
information




V V Rao@ECT
05/28/2001 06:21 AM
To: Clay Harris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rick 
Bergsieker/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: Meeting with NWS at LNG 13 - Followup

Today, I spoke to Greg Veitch (Shell's representative to NWS) about an 
upcoming meeting.  During the call, he asked me about Mike McConnell's 
comment at the LNG 13 meeting that we were concerned about some of NWS' 
consortium partners and how they viewed a potential sale of LNG to Enron.   
He was concerned that Enron was inferring that Shell or BP somehow interfered 
with the process that NWS had instituted in evaluting the bids they received 
for the wedge cargoes.  I told him that I didn't know what exactly Mike meant 
but that it was probably more in the context of Shell and BP being global LNG 
competitors of Enron and not to the specific process around the wedge deal.  
I also told him that I was quite comfortable with the process that NWS used 
in evaluting the wedge cargo proposals and that I didn't see any issues (i.e. 
we assume that Shell put in the best proposal for NWS both on price and 
flexibility and that the final evaluation was made by all partners except 
Shell and BP).  

I've gotten to know Greg quite well over the past year and he told me off the 
record that Shell's bid was quite a bit better in terms of price (he implied 
about 15-20 cents higher) and flexibility (basically no call back premiums).  
This is something I have also been able to confirm indepedently with our 
contacts at Mitsubishi and BHP.   Once we lost MetGas as a potential 
discharge point for the wedge cargoes,  Shell had an advantage over us 
because of access to Cove Point's higher basis differential and access to a 
larger shipping fleet.    This underscores the point that Enron will find it 
difficult to compete on Price and Flexibility on merchant deals in the near 
term.  Our ability to develop proprietary global market outlets supported up 
by a critical mass in shipping will be the key to developing a viable LNG 
business. 

vvr