Top 10 illegal items seen at Frisco's Front Yard Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India LNG project gets in-principle nod from Australia 06/03/2001 Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - Asia Intelligence Wire MELBOURNE: Enron Australia Pty Ltd, the local branch of the energy giant, Wednesday received a $US3.5 billion in-principle approval from the Indian government to proceed with its first LNG project in the impoverished state of Orissa. Aside from the energy giant and a consortium of 10 international oil companies led by Royal Dutch Shell, the partners in the $US7 billion plant are Japan's Mitsui and Mitsubishi, Britain's BG Group and Bechtel, US' GE and Cogema, France's Total and Societe Generale de Surveillance of Algeria. With these partners, Enron will set up and operate an LNG plant in Orissa's block 12, the seventh licensing round for which was awarded in January 2000. The consortium will build a regasification terminal, an LNG import terminal and a mother ship to transport LNG. An Enron spokesman said the company now needed "a few months" to find "economic terms" with the Orissa state government for constructing the project. The state government wants Enron to make a financial commitment before the end of 2001 and has reportedly asked for $US200 million in payments upfront. The LNG plant will use ethane, imported from Algeria, and free on board (FOB) LNG to generate electricity. The project will supply 1,000 MW electricity to the state as well as gas to the fertiliser sector and industrial consumers. This is the first in-principle approval awarded since federal and state governments decided in May 2000 to privatise the LNG sector. It will also be the first project to be built through a PPA (power purchase agreement) as the Centre, under the Enron deal, has authorised the company to negotiate with state governments. The other partners are also in the process of finalising their PPAs with the Orissa government. "The in-principle approval gives us a free hand on the project's FDI (foreign direct investment)," an Enron India spokesperson said. The consortium plans to fund 70 per cent of the equity requirements for the $US3.5 billion project with 20 per cent in debt and a loan commitment from Morgan Stanley of $US1 billion, subject to a final investment decision. The balance will be from corporate debt and equity, the company said. There are 30 LNG projects in different stages of FDI appraisal in India. Of the 14 projects at different stages of appraisal that require foreign funding, 12 require direct foreign investment while the remaining need only foreign equity participation. Mitsui, Mitsubishi, Shell have all announced their FDI intents. Shell has said it would invest $US2.5 billion and Mitsubishi, $US1.5 billion, in two JV projects in the Krishna Godavari basin of Andhra Pradesh, one of which will be a 25 million tonnes LNG import terminal and the other a pipeline 1,440 km long to carry C02-rich natural gas from the KG basin to the international market. In the case of Shell's project, it is also expected to involve BP Amoco, Reliance Industries, India's GAIL (formerly known as Gas Authority of India Ltd) and the Oil and Natural Gas Corporation (ONGC). Last month BP Amoco announced its FDI plans for LNG in India, pledging $US1 billion for upstream development of natural gas resources in India. At an investiture ceremony of Orissa's newly elected Speaker, Rabi Mohan Choudhury, Enron's managing director and chief executive Jeff Skilling said the Enron deal was a part of the Centre's policy to encourage private players to enter the growing Indian power sector. The Enron deal has been under the scanner of the Central Electricity Authority, the Orissa state government and the Opposition parties ever since it was signed in a star-studded ceremony at Houston's George R. Brown Convention Centre last August. The first LNG shipment, aimed at supplying energy to the power sector, is scheduled for late 2004 and the first delivery of industrial gas in early 2005. The plant will be ready in two phases of construction, the first being commissioned in 2006. --Abhay Singh Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. USA: UPDATE 1-Southwest gets incentive to add Texas flights. By Kala Rama 06/03/2001 Reuters English News Service (C) Reuters Limited 2001. DALLAS, June 3 (Reuters) - Low-fare carrier Southwest Airlines Co. said on Monday that the Texas Transportation Commission has approved an economic incentive package to add flights between two Texas cities and four cities in Florida. The TTC approved Southwest's request to fund 25 percent of the cost to add service to Austin, Texas, and Harlingen and McAllen, Texas, which would be served from Houston Intercontinental and Hobby Airport, starting in June. Low fares on Southwest were one reason for last month's bankruptcy of Air Tran Airways, which had received a TTC grant to add non-stop flights to Texas. Southwest shares ended Monday's regular session at $12.68, down 25 cents. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India to block Enron power project Santosh Tiwary and Doug Arnold 06/03/2001 Agence France-Presse (Copyright 2001) CALCUTTA, June 3 (AFP) - The Indian government will ban U.S. power giant Enron from taking part in a controversial power project in the western state of Maharashtra, officials said Monday. "Enron's role will not be allowed," a senior government official told AFP, without specifying who would bear the cost if Enron was not allowed to participate. It was, however, learned that the company would not be forced to hand back any of its holdings. India's Maharashtra state is planning to buy Enron's local unit Dabhol Power Company in order to re-negotiate the $3 billion project's nearly nine-year-old power purchase agreement (PPA). The project has been mired in controversy since its inception, and faces several legal cases filed by local farmers who claim they have been overcharged for electricity. When contacted by AFP, a Enron spokesperson was unwilling to comment on the matter. On Sunday the head of Enron in India, Neil Mcgregor, said the company's decision to exit the project was driven purely by commercial considerations. Enron pulled out of the project in May last year following the Maharashtra government's failure to honor an interim payment of $48 million. New power contracts of five billion rupees (about $93.5 million) were signed with the Maharashtra State Electricity Board (MSEB) last month. Local media reports suggested that Enron and MSEB were unable to agree on the purchase price for the power. Enron was supposed to invest $2.9 billion in the Dabhol plant, but now it is set to lose its investment of $875 million as well as another $250 million in foreign exchange losses. --AFP London Office: 44-20-8425-9292 Cell: 44-7783-424-9709 fax: 44-20-8425-4523 *Agence France-Presse 115563 Paris 00 01-44 26 63 75 00 Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron's India Unit Willing To Cut Rates By 10% For Poor: Report 2001-06-03 14:56 (New York) Mumbai, June 3 (Bloomberg) -- The Indian unit of Enron Corp., the world's biggest energy trader, said it's willing to cut power prices by 10 percent for India's poorest villages if the local government buys the electricity, a newspaper reported. Enron India Ltd., the local unit of Houston-based Enron Corp., is ``ready to adjust tariff in such a way it should fetch them a good revenue'' on the average consumption per village in northern India, the Hindu Business Line reported. Enron wants to boost power sales from its own and government- run projects in