I would like for us to take a look at charging Peerless some sort of number based on the market price for leased storage.  I talked to a guy in the Enron liquids group who said that 2-oil tankage in the Caribbean goes for about $0.25- $0.30 per barrel per month.  If we leased them only 150,000 bbls of capacity in the tank and kept the rest for ourselves, that would be around $40,000/month.  The actual number could be whatever we are comfortable with keeping in storage as minimums.  If we could get something out of it every month and still sell them our inventory that would be great.  But I would also like to know how it looks in case they wouldn't go for that and we had to hold title to whatever oil we already have in the tank. Then we could still have some sort of pricing mechanism for buying and selling oil to each other in the tank.

From what I heard from Peerless, they would plan to unload vessels into Eco's tank, then transfer out of that tank to their other tanks when needed.  Whatever the case would be, we would have to have controls on quality in our tank, and insist on seeing the analysis on everything before it goes into the tank.

Dan

 -----Original Message-----
From: 	Y'Barbo, Paul  
Sent:	Friday, May 25, 2001 3:49 PM
To:	Sanabria, Jaime; Masters, Dan
Cc:	Sierra, Rick; McMillan, James
Subject:	RE: Peerless Proposal as discussed on Thursday, May 17, 2001


Jaime,

Seems like this could be a good deal for Eco. The pricing seems reasonable to me given the fact that Peerless will have money tied up on inventory that we will seldom use.

Questions:

1. what is the going rate for leasing tank capacity in the area?

2. will Peerless be storing No.2 (that meets our quality specs) in tanks in addition to Eco's? Do they plan to transfer diesel back and forth between those tanks? If so, how do we control quality?

3. how much Minimum Inventory will Peerless agree to? The more the better for Eco.


Note: The Platt's Index is Low Sulfur No.2 U.S. Gulf Coast - Waterborne

Dan - comments?

Paul
 -----Original Message-----
From: 	Sanabria, Jaime  
Sent:	Friday, May 25, 2001 12:35 PM
To:	Y'Barbo, Paul; Masters, Dan
Subject:	Peerless Proposal as discussed on Thursday, May 17, 2001
Importance:	High

Paul / Dan:

Can you give me your opinion as to the structure of this deal, based on your experience?
---------------------- Forwarded by Jaime Sanabria/ENRON_DEVELOPMENT on 05/25/2001 12:42 PM ---------------------------

 << OLE Object: Picture (Device Independent Bitmap) >> 
"pocesco" <pocesco@email.msn.com> on 05/21/2001 03:49:00 PM
To:	"ENRON: Sanabria, Jaime" <jaime.sanabria@enron.com>
cc:	"PEERLESS OIL - Edward A. Maciula" <edmaciula@email.com>, "PEERLESS OIL - Louis Vasquez" <turk608@hotmail.com>, "PEERLESS OIL - Madeleine Greyshon" <cleospike@yahoo.com> 

Subject:	Peerless Proposal as discussed on Thursday, May 17, 2001



Dear Jamie,
 
I am attaching (as MS Word and as Lotus Wordpro) the  "Letter-Proposal" which Ed Maciula and I had promised to send you  after the meeting of Thursday, May 17. This same "letter-Proposal" is also being  mailed (the U.S. Postal Service type!) to you.
 
After you have had a chance to review it, please give Ed  or me a call so that either of us could offer clarifications (if  necessary), or, at least, see how we all might wish to proceed.
 
Thanks very much, again, for the meeting ...
Best regards,
 
AZMAT
 - ECOELECTRICA  Letter Proposal to Jaime Sanabria.lwp << File: ECOELECTRICA  Letter Proposal to Jaime Sanabria.lwp >> 
 - ECOELECTRICA  Letter Proposal to Jaime Sanabria.doc << File: ECOELECTRICA  Letter Proposal to Jaime Sanabria.doc >>