Andy --

If that is the case, for the example we went through yesterday, the
transport cost would be:

(NYMEX offer + Amarillo offer)*(1/(1- fuel ratio)) + commodity charge
(2.80 -0.05)*(1/(1-0.0319)) + 0.0167
2.75*1.0329 + 0.0167 = $2.86

How do you compare this transport cost to the spread between Amarillo and
Chicago basis and index (12 cents) to decide whether to transport?

Thanks!
Ann




            Andrew.H.Lewis@enron.c
            om                            To:     Ann S. Chen/Internal/Accenture@Accenture
                                          cc:
            11/15/2001 12:26 PM           Subject:     RE: Calculating transportation per MMBtu --- I think I
                                          got it






See correction below
    -----Original Message-----
   From:   ann.s.chen@accenture.com@ENRON
   Sent:   Thursday, November 15, 2001 12:15 PM
   To:     Lewis, Andrew H.
   Subject:  Calculating transportation per MMBtu --- I think I got it

   Is the formula for calculating transport cost:

   cost of gas at receipt*(1/(1- fuel ratio)) + commodity charge?


   ----- Forwarded by Ann S. Chen/Internal/Accenture on 11/15/2001 12:12 PM
   -----

               Ann S. Chen
                                            To:
   Andrew.h.lewis@enron.com
               11/15/2001 11:44 AM          cc:
                                            Subject:     Calculating
   transportation per MMBtu




   Andy --

   I have a couple of questions as I dive more into the details of figuring
   out transportation costs. Still trying to figure out how you make your
   decision whether to transport or not.  You compare the cent spread
   between
   the Amarillo(offer) and Chicago basis(bid)+Nicor Index(bid) versus the
   transportation cost.  In the numbers you provided in your example, the
   spread was 12 cents.  I'm still confused as to how you compute the
   transportation cost to compare that spread with. The fuel ratio you
   specified was 3.19% and the commodity was $0.0167.

   Thanks,
   Ann


   ----- Forwarded by Ann S. Chen/Internal/Accenture on 11/15/2001 11:31 AM
   -----

               Ann S. Chen
                                            To:
   Andrew.H.Lewis@enron.com
               11/14/2001 06:00 PM          cc:
                                            Subject:     Transportation
   Scenario Update




   Hi Andy --

   Thanks for helping us understand the tranportation and storage problem
   today. We appreciate your patience. I know it's like teaching a baby how
   to
   walk!

   Anyway, just wanted to get you the updated numbers for the
   transportation
   scenario, based on the changes you made at teh meeting today.  Can you
   also
   double check with Philip regarding the issue with hedging Basis with
   regards to transportation?

   Have a great weekend!

   Thanks!
   Ann

   (See attached file: Transportation.doc)




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    - Transportation.doc << File: Transportation.doc >>



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