PRIVILEGED AND CONFIDENTIAL:  ATTORNEY-CLIENT COMMUNICATION, ATTORNEY WORK 
PRODUCT

Matt,
 
Thanks for the heads-up on this issue.  I will confer with Janice and one of 
us will get back to you.  

Meanwhile, I think I may need further clarification about  what testing 
methods were used by SGS at loadport and at discharge in Thailand and the 
Phillipines.  My key area of concern is whether (as now appears unlikely from 
your e-mail) SGS tested using both ASTM D3605 without ashing and ASTM D3605 
with ashing at all the relevant points, and whether the test results were 
consistent; e.g., whether the product was on-spec for both methods 
immediately before loading, but off-spec for both methods at discharge in 
Thailand and the Phillipines.  May I impose on you to provide one summary 
chronology of the analysis done at loadport and both discharge ports, with 
particular emphasis on (a) whether both testing methods (ASTM D3605 without 
ashing and with ashing) were used, and the results, and (b) the results for 
filterable dirt? (You have just sent something like this for the Thailand 
cargo only, which I found very helpful).   Also, if SGS or anyone else has 
made comment about the reliability or unreliability of the filterable dirt 
analysis (or any other aspect of the testing done by SGS of this cargo), 
please let me know about that as well.

I appreciate your good help.

    Britt

   



	Matthias Lee@ECT
	08/08/2000 06:39 AM
		 
		 To: Janice R Moore/HOU/ECT@ECT, Britt Davis/Corp/Enron@ENRON
		 cc: Alan Aronowitz/HOU/ECT@ECT, Harry M Collins/HOU/ECT@ECT, Angeline 
Poon/SIN/ECT@ECT
		 Subject: D3605

Dear Janice / Britt

I know that Janice has kindly agreed to return to the team to advise and 
coordinate with Mike Brown's team and myself in regard to the D3605 issue, 
whilst I am to look to Britt's guidance for the contamination on the Elang 
cargo. My apologies therefore for mixing the issues for the puposes of this 
e-mail. 

The joint testing of samples of the Elang cargo is planned to take place end 
next week. The joint testing would include metals as well as filterable dirt, 
so we would need to decide, in quite short order, on the test method we want 
to propose for metals for relevant parties to agree.

Although we believe the contamination would be dramatically demonstrated by 
the level of filterable dirt, the metals clearly would also be an important 
factor. As you may be aware, the loadport sample results which we are 
presently relying on to say that the cargo was on spec when loaded, was 
tested with "ashing" for metals. We would not be able to say whether another 
loadport sample would test on spec for metals using straight D3605. If it 
doesn't test on spec at the joint testing using straight D3605, the vessel 
owners would surely argue that the cargo would have been rejected by First 
Gas anyway, independent of the filterable dirt. Although such as argument may 
not defeat our case entirely, it is very likely to impact on the quantum we 
would be able to recover.

It seems that the preferred test method for metals at the joint testing would 
therefore be "ashing" to avoid conflict with existing loadport sample 
results. We still have SGS's support for that, but we need to convince Minton 
Treharne who acts for the cargo underwriters as well as the Owners/P&I Club. 
Still, just in case details of our dispute with Mitsubishi become known to 
Firts Gas, we may wish to avoid proposing a test method for joint testing 
that would be inconsistent with the one we ultimately present to First Gas, 
which for obvious long term objectives ought to be the CORRECT test method 
acceptable to parties whether D3605 or "ashing" or some other method. That 
said, I think if we are able to go with "ashing" for the joint testing, it is 
not likely to jeopardize our position with First Gas. 

I note Janice's preference for US experts over European experts for the D3605 
issue. Have we been able to get any US experts' view on the right test to use 
(whether D3605 or "ashing")? Has Enron formed a view on the "correct" test 
method? If we have been able to source a "friendly" US expert, we may want to 
have his input for the contamination issue. 

Your views and guidance would be most appreciated.

Thanks and regards
Matt







I also note Janice's preference to source for US experts to assist us on the 
D3605 issue over European experts and was wondering whether we have been able 
to for