Eric,
What do you think?
m
---------------------- Forwarded by Mike McConnell/HOU/ECT on 04/09/2001 
12:26 PM ---------------------------


Bob Nimocks <BNimocks@ZeusDevelopment.com> on 03/20/2001 10:04:55 AM
To: "Mike McConnell (E-mail)" <Mike.Mcconnell@enron.com>
cc:  
Subject: LNG's Role in North American & Caribbean Gas Supply

Mike: 
Understand LNG continues to be an enigma cloaked in a mystery for Enron.  We 
are continuing to expand our coverage and knowledge base of this marketplace, 
especially in the Western Hemisphere and would like to meet with you to 
discuss our observations and learn more about Enron's desires in this arena.  
Also, we have a meeting planned in D.C. in late June, entitled "LNG's Role in 
North American & Caribbean Gas Supply."  With the U.S. hunger for gas and El 
Paso, AEC and other's announcements of new projects, the meeting should be 
constructive, especially with DOE and FERC involvement.  See summary below.
Let me know when you might be available to discuss the LNG marketplace.  
We've just completed a white paper, entitled "Atlantic-Basin LNG: A Whirling 
Supply/Demand Balance."  You may find our conclusions of interest.
Best regards, 
Bob Nimocks 
President 
Zeus Development Corporation 
www.zeusdevelopment.com 
2424 Wilcrest Dr., Suite 250 
Houston, TX 77042 
Direct: 713-952-9529 
Main: 888-GR8-DATA (478-3282) 
e-mail: bnimocks@zeusdevelopment.com 

*********************************** 
TITLE:  LNG's Role in North American & Caribbean Gas Supply 
DATE/LOCATION:  Washington D.C., June 27-29 
SUMMARY:  The winter of 2000/2001 confirmed the shift in the United States 
from a buyer's to a seller's market. Gas supplies for North America ran short 
as demand rose from colder weather, higher electricity demand and shortages 
in storage from the previous year.  More and more supply is shifting from the 
U.S. Gulf Coast to Western Canada as offshore exploration in the Gulf of 
Mexico has proven disappointing.  U.S. demand for power generation is 
expected to keep gas demand high through the summer of 2001, siphoning off 
gas that would have been destined for storage.  
Meanwhile during the long gas bubble of the 1980s, drilling rigs and 
experienced field personnel dwindled from thousands to several hundred.  The 
current rig count for North American gas exploration and production is near 
full capacity at just over 600 rigs, so the industry is constrained on how 
quickly it can recover.  
The U.S. has not experienced shortages of natural gas like this since the 
1970s and early 1980s when it was feared that the nation would run out of gas 
in 10 years.  Four LNG import terminals were built to supply natural gas from 
North Africa (Algeria).  These terminals are capable of supplying up to 5% of 
total U.S. gas consumption (about one trillion cubic feet per year).  Plans 
are underway to have all four terminals fully operational by the end of 2002; 
however, more are needed.  
Conventional wisdom is that no new terminals would be built in the United 
States due to EPA laws and local citizen protests to any facility perceived 
to be unsightly or dangerous.  Now, El Paso (a company that was burned by 
Congress in the 1980s by the ruling that take-or-pay LNG contracts with 
Algeria were invalid) is challenging conventional wisdom. They have announced 
plans for six new terminals to be built in North America: three in the United 
States and three in Mexico.    New LNG plants in Venezuela, Algeria and 
Northern Australia might supply these terminals. 
Other companies, such as Enron and AEC, have announced plans to build 
terminals in the Caribbean to supply gas to independent power production 
(IPP) plants ranging from 400 to 1000 megawatts.  Moreover, LNG facilities on 
Caribbean Islands close to Florida might export gas or electricity via 
undersea pipeline and cable.  Floating offshore LNG terminals may also offer 
a means to bring LNG into the United States with less environmental and 
community concern.  
The June 27-29 conference, entitled "LNG's Role in North American & Caribbean 
Gas Supply," will cover the dynamics that are leading to North American gas 
supply shortages, how long they are expected to last, and what source of 
natural gas are available from conventional sources to meet demand.  The 
conference will then focus on opportunities for LNG, including the capacities 
and timing of current terminals, the prospects for new mainland and offshore 
terminals, and the opportunity for broader terminal networks in the 
Caribbean, including those facilities that might supply gas or electricity to 
the United States.  
* * *