---------------------- Forwarded by Zimin Lu/HOU/ECT on 08/30/2000 11:06 AM 
---------------------------


Zimin Lu
08/30/2000 11:07 AM
To: Colleen Sullivan/HOU/ECT@ECT
cc: Andrew H Lewis/HOU/ECT@ECT, Greg Couch/HOU/ECT@ECT 
Subject: Transport Fuel P/L



Colleen,

After looking into the transport deals for NBPL (long term deal 1,2, 25,26), 
I think I figured it out why
we see positive fuel P/L for deal 1,25,and 26 and negative fuel P/L for deal 
2. 

The following plot shows NYMEX curve as of 8/23/00:




For short term, NYMEX moved up compared to that of 8/22/00, while the long 
term NYMEX moved down.

Here are the tenor for each deal:

Deal 1:   start 01-Sep-00, end 22-May-09,    the above graph suggested a 
positve fuel P/L
Deal 2:   start 01-sep-00, end 28-feb-02,       the above graph suggested a 
small negative P/L
Deal 25: start 01-may-02, end 28-feb-09,      the above graph suggested a 
positve fuel P/L
Deal 26: start 01-mar-09, end 31-may-09,    the above graph suggested a 
positve fuel P/L

The transport book seems to be correct on these fuel P/Ls. 

Another point worth to mention is that the fuel cost is related to index 
price (NYMEX+basis+index premium), to correctly interpret fuel P/L,
we need to look at the index curve change. 

Let me know your thoughts on this.



Zimin