Greetings:

I am attaching my Excel spreadsheet that takes you through the various iterations of the capital expenses and cost-of-service calculations for the Elba Island LNG Terminal.  I have included certain "estimate" information that reflects my attempt to derive cost-of-service information to augment what Southern LNG has provided.

Rod Hayslett has kindly agreed to develop the proper algorithm to more accurately calculate this information and to work with Eric Groves on integrating this as a module in Eric's LNG economic evaluation model for the Atlantic Basin.  I believe we will need this in order to analyze the proposals that we expect to receive from El Paso Merchant Energy this week.

I would also like James McMillan to take a look at the commodity charges and electric power rates for the nitrogen injection, air injection and gas liquids stripping cases, as well as at the fixed O&M costs.  Some updating of the "estimate" information is likely needed.

I will send copies of the relevant background information received from Southern LNG to each of you.  In addition, I will be sending out a general memo to a wider audience with the attached spreadsheet.

Regards.
Les Webber