I love the "club" quote, because they really are.  It is a good old boy network that colludes against every day and every month.  In this case, the "club" is Reliant, Williams, Duke and others who own TW transport to SJ from Ignacio.  Our TW transport expires in Dec, so for Enron to bid firm 100% flow in the SJ, we have to price it at a discount because of the cuts through Bondad on El Paso.  We could bid higher if it was average flows or we had TW firm transport.

 -----Original Message-----
From: 	Mrha, Jean  
Sent:	Thursday, October 11, 2001 10:39 AM
To:	Grigsby, Mike
Cc:	Shively, Hunter S.
Subject:	FW: Cordillera Update
Importance:	High


Mike, Who do you think the "club" is?

 -----Original Message-----
From: 	Miller, Kevin  
Sent:	Thursday, October 11, 2001 9:11 AM
To:	Roberts, Linda
Cc:	Mrha, Jean; Rainer, Eva
Subject:	Cordillera Update
Importance:	High


Linda,

After our conversation yesterday, I spoke with Tad Herz of Cordillera.  According to Tad, Cordillera has received bids from some "small niche" marketers for their San Juan production that were very attractive.  Per Tad, these local marketers enjoy some market advantage that allows them to overcome the large discount ($0.15) that Enron sees at the tailgate of the Ignacio Plant.  Tad referred to these marketers as a "club".  Therefore, Cordillera is not interested in Enron purchasing its San Juan production.  

Tad has requested that Enron modify/limit its proposal to just the Mid-Continent gas.  Contrary to Tad's comments on Tuesday, Tad stated yesterday that our Mid-Continent bid was competitive and Enron was definitely in the running for the Mid-Continent gas.  On Tuesday, Tad said Enron's Mid-Continent price was a little low.  For what its worth, Tad stated that Cordillera's target area to grow its production is the Mid-Continent area.   

Per our conversation, you said that the only way to improve Enron's Mid-Continent bid was to look at trying to sell the gas in the Mid-Continent area to some outside company.  Is this practical for the small volume that Cordillera controls?  Should Enron even look at selling wellhead gas to companies outside of Enron?  It appears that Enron may not be able to improve its proposal.

Linda,  I told Tad that we would target Friday to get a revised proposal to him.  We could have more time if we need it.  


Let's discuss this matter.

Kevin 
 


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