Hello everyone,

I have modified the storage valuation model to adopt the deal of synthetic 
storage.
For the 11 month synthetic storage deal proposed by the
Peoples Energy , the model gives $0.51/mmBtu.    Thus the People's bid for  
$0.49/mmBtu is in line with the model.

I would be happy to discuss the details for everyone who is interested.   In 
essence, the model allows optimal  injections
during March-May and optimal withdraws dring Dec-Jan.  The model also 
encourages the storage to be full at the 
end of May, and empty at the end of Jan.  

Zimin
x36388


   
	Enron North America Corp.
	
	From:  Airam Arteaga                           03/20/2000 01:50 PM
	

To: Scott Neal/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, Jim 
Schwieger/HOU/ECT@ECT, Stinson Gibner/HOU/ECT@ECT, Zimin Lu/HOU/ECT@ECT, 
Farzad Farhangnia/HOU/ECT@ECT, Fletcher J Sturm/HOU/ECT@ECT, Hunter S 
Shively/HOU/ECT@ECT
cc: Ina Rangel/HOU/ECT@ECT, Kimberly Brown/HOU/ECT@ECT, Barbara 
Lewis/HOU/ECT@ECT 
Subject: Synthetic storage

The below meeting from Farzad Farhangnia, has been rescheduled to Wednesday, 
March 22 at 3:00 pm in EB30C1.  

Please call Rain at x.31560, if you have any questions or are unable to 
attend.

Thanks,
Rain


---------------------- Forwarded by Airam Arteaga/HOU/ECT on 03/20/2000 01:40 
PM ---------------------------


Farzad Farhangnia
03/17/2000 05:00 PM
To: Hunter S Shively/HOU/ECT@ECT, Fletcher J Sturm/HOU/ECT@ECT, Scott 
Neal/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, Jim Schwieger/HOU/ECT@ECT, 
Stinson Gibner/HOU/ECT@ECT, Zimin Lu/HOU/ECT@ECT, Farzad 
Farhangnia/HOU/ECT@ECT
cc:  
Subject: Synthetic storage

I have asked Stinson and Zimin, from the research group, to meet with us and
help price the inherent optionality in storage deals.  We are meeting on 
Monday 
at 3:00 in room EB3127.  Please let me know if you are unable to attend.

Regards,

Farzad