Manfred / Sven - congratulations on getting the Bremen deal signed!  This 
business represents the first significat long-term deal we have in Germany.  
It also allows us to expand our "stockpile" business on the Continent - and 
will allow us to develop a hub in Nordenham.  The ability to put petcoke to 
Bremen is an added benefit.  

Nice job on this deal - it took a lot of work on your part to get Bremen 
comfortable with our shipping such a large percent of their requirements.

Best regards,

George

-----Original Message-----
From: Becker, Sven
Sent: Sun 4/29/2001 3:24 PM
To: Mcclellan, George
Cc: Staley, Stuart; Ungethum, Manfred
Subject: Summary on Bremen Deal

Hi George,

as requested just a quick summary on the Bremen transaction which was finally 
signed by Bremen on Thursday (yesterday I also received the signed contract 
from Bremen).

 Term:
 from 1 May 2001 to December 2006, although we have already delivered since 
1/1/01 under the same contract terms as the long-term agreement.

 Volume:
 4.6 Mio. t firm over 6 years 
  2001: 935 
  2002: 820
  2003: 820
  2004: 820
  2005: 615 (tail-off due to expected shut-down of one block) 
  2006: 615 
 For 2002 to 2006, this will cover about 80% of Bremen's needs. We can be 
very confident to also attract the remaining 20% in the open tenders due to 
advantages on logistics and possible matching of best price.

 Quality:
 Generic with very generous quality specs (wider than SECA; also allows for 
1.7% sulphur)
 Under the deal we can also deliver 10% as pet coke (if the blend meets the 
wide quality specs)

 Pricing: 
 We deliver CIF @ BAW price. BAW is weighted average import price which lags 
the market by 2-3 quarters. In rising markets we lose against spot purchase, 
in falling market we win against it.
 If Bremen takes less than 10% pet coke, we will get a premium for each % 
point that Bremen underlifts. In this case, we are either financially deemed 
to have delivered pet coke (we get the difference between BAW price and pet 
coke) or a fixed premium of $0.15/t per each % point (max. of BAW price + 
$1.50)

 Strategic Advantages of Deal:
 -  Significant position in the German market; breakthrough transaction in 
the German market ) this transaction represents about 3% of current German 
coal imports. It will make us one of the established players and help foster 
our track record in Germany.
 -  Longer-term volume flow in Northern Germany that will create economies of 
scale for the supply of smaller customers in the area;
 -  Building Nordenham as the bridgehead for the supply of Northern Germany; 
With increasing imports into Germany the Bremen volumes will enable ECS to 
take an active port position in Nordenham. This may be valuable since port 
capacity will have increasing value (currently under scrutiny).
 -  Optionality on remaining synor tonnage; abilitay to fill in remaining 20% 
of Bremen needs. This can already be seen this year where we are expected to 
deliver 935,000 instead of the contracted 820,000.
 - Upside from delivery of more of 10% of contractual volumes as petroleum 
coke (we can do this, if technically ok - under the contract Bremen actually 
has incentives to burn more than 10%).
 - Follow-on Deals with Bremen; we have started discussions on a coal-fired 
power block that Bremen would like to rent out to us and Bremen has offered 
us to do all their port business in Nordenham (thus, we would transform CIF 
deal into FOB deal) which would strengthen our position in Nordenham).

George, if you have any questions related to the deal and its structure, 
please do not hesitate to call either Manfred or myself (011-49 173 3070824).

Kind regards
Sven