FYI   (I don't know why I still keep getting these ......) 
----- Forwarded by Shari Stack/HOU/ECT on 08/07/2000 09:45 AM -----

	Rogelio L?pez Velarde <rlopezv@lvha.com.mx>
	08/04/2000 02:52 PM
	Please respond to Rogelio L?pez Velarde
		 
		 To: Sara Shackleton/HOU/ECT@ECT, Shari Stack/HOU/ECT@ECT, Steve Van 
Hooser/HOU/ECT@ECT
		 cc: 
		 Subject: CRE Resolution Encouraging the Use of Financially Settled Commodity 
Derivatives Transactions For Natural Gas Prices         .




August 4, 2000.


MEMORANDUM

VIA E-MAIL

To: Steven Van Hooser, Esq.   Enron Capital & Trade Resources
Shari Stack, Esq.
 Sara Shackleton, Esq.

From: Rogelio L?pez-Velarde
 Sean McCoy

Re: CRE Resolution Encouraging the Use of Financially Settled Commodity 
Derivatives Transactions For Natural Gas Prices         .


The Energy Regulatory Commission (Comisi?n Reguladora de Energ?a) ("CRE"), 
published last Wednesday in the Federal Register a resolution by means of 
which the CRE encourages the use of financially settled commodity derivatives 
transactions ("Financial Instruments") to hedge the risk of the natural gas 
price variations in Mexico (the "CRE Resolution"). Over-the-counter Financial 
Instruments transactions are being enticed by the CRE in light of the surge 
of natural gas prices1. It is expected that such derivatives market will be 
expanded to other type of energy commodities, such as electric power.

Essentially, the CRE is encouraging the use of Financial Instruments by 
giving a discount of the price index applicable for the month of August, 2000.

The CRE Resolution provides in general terms that:

1. The Mexican Users2 that are able to sign a Financial Instrument with 
Pemex-Gas y Petroqu?mica B?sica ("PGPB"), or with any third party, before 
September 1, 2000, covering commodity prices fluctuations for the period of 
September 2000 thru February 2001, will benefit from a factor of at least 
0.75, which will be applied to the price of reference (i.e. $3.705 U.S. 
Dollars per MMBtu), which results in a price of $2.7788 U.S. Dollars per 
MMBtu, only during the month of August, 2000 (the "Discount Factor").

 2. Mexico's Local Distribution Companies ("LDCs"), that have contracted 
Financial Instruments for their clients, shall passthrough to the Users the 
benefits resulting from the Discount Factor, only if such end users have 
previously agreed upon the rendering of such services.

 3. Needless to say, the price determination for the period of September 
2000, thru February 2001, will be freely agreed upon between seller of the 
Financial Instruments, and the User or the LDC, as the case may be.


       Very truly yours,













































RLV/JCC/SMC
H:\jcc10\VARIOS\Futuros Gas\MM Futuros Gas.doc


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