Stinson/Vince,

I think this is important to know.

Regards,
Sandeep.
---------------------- Forwarded by Sandeep Kohli/ENRON_DEVELOPMENT on 
03/28/2001 08:23 AM ---------------------------

	
	Anshuman Srivastav
	
	03/28/2001 06:32:20 AM
	
To: Marc De La Roche@ECT
cc: Tushar Dhruv@Enron, Doug Leach@ECT, Mohan 
Gurunath/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rajesh 
Sivaraman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Shubh 
Shrivastava/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Mukesh 
Tyagi/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT (bcc: Sandeep 
Kohli/ENRON_DEVELOPMENT)

Subject: Hedging LNG Volumes


	

Hi Marc,

DPC would like a swap to hedge its price expsoure on LNG. We do understand 
that there exists a basis risk between JCC (the LNG SPA index) and Brent (the 
market index for the product) and will bear such risk. We also appreciate the 
fact that this is a financial product and irrespective of actual consumption, 
we will still have to bear the burden (if any) of the swap. 

Fuel - LNG indexed to JCC (closely correlated to Brent Futures)

   Period     Volumes (TBtu)  Volumes(MT)  Volumes(JCC Bbls)
  January 2002 to December 2002    33.61          650,000     9,127,049  
  January 2003 to December 2003    48.63          940,000   13,207,496
  January 2004 to December 2004    48.63          940,000   13,207,496

Crude Swap Price: Can we look at a 'dirty' hedge and get a crude($/Bbl) swap 
price. Like any other regular swap, this will be a monthly settle product.

The above conversions from MT to Bbls are based on LNG conversion factors. 
(14.04 Bbls/MT). 

We also would like to understand the requirements of the Credit Group to put 
this hedge in place. Please indicate the process as well as the security 
mechanisms to provide adequate credit support for the swap. 

Please call me(98210 38711) or Rajesh (98201 88310) for any additional info.

Regards,
Anshuman