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Wholesale - Developing Markets

This strategy focuses on deploying top commercial talent to build regional energy businesses, establishing strong asset positions, shaping evolving regulations, extending Enron's merchant services to new markets, and targeting high-growth, deregulating energy markets.

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Wholesale - Developing Markets

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  1. Wholesale - Developing Markets

  2. Australia Enron’s Developing Markets Strategy Japan Caribbean India South America • Deploy Top Commercial Talent Locally to Build Regional Energy Businesses • Establish Strong Asset Positions to Link and Expand Energy Flows • Shape Evolving Regulations and Benefit From Changing Markets • Extend Enron’s Merchant Services to New Markets

  3. Asia Pacific

  4. Asia Pacific • Targeting High-Growth, Deregulating Energy Markets • Rapid, Successful Replication of Enron’s Business Model • Significant Network Expansion Opportunities

  5. Enron Australia Market Overview • Deregulating Wholesale Power and Gas Markets • High Power Price Volatility • 157 TWh Power Annually NORTHERN TERRITORY QUEENSLAND WESTERN AUSTRALIA SOUTH AUSTRALIA Enron’s Business NEW SOUTH WALES • Opened Office in Late 1998; Early Profitability • Opportunities Led by Power • Full Range of Energy Products Offered • Provides Skill Base for Growth in Region Office Power VICTORIA Energy Marketing Activity TASMANIA Counterparties Transactions Volumes (Million MWh) 3.2 357 16 3 36 0.1 1998 1999 1998 1999 1998 1999

  6. Japanese Energy Market Large Liberalizing Power Market Estimated March 2000 (Twh) • Power Market Opens March 2000- Large Industrial Customers - 24% of Total Market Initially • Active Deregulation Underway • World’s Highest Industrial Power Prices • Market Consensus for Continued Energy Reform Not Open Open 420 3,164 700 450 220 1,710 Japan North America Source: Various

  7. Enron Japan Market Overview • Attractive Commercial Market • Mature Financial Markets • Sophisticated Counterparties Power Natural Gas Enron’s Business • Extending Enron’s Wholesale Competitive Advantages • Strong, Experienced Local Management • Full Complement of Enron Skills Deployed • Reducing Energy Costs of Major Industrial End Users • Extending Enron’s Retail Energy Service Capabilities Coal Crude Products Financial Products

  8. Enron Japan Wholesale Operating Approach Risk Management and Merchant Services Generation Aggregation • Secure Rights to Excess Generation Capacity • Utilize Local Partners; Maintain Influence and Control • Utilize Early Interest in EnronOnline to Establish Strong Energy Franchise • Actively Build End User Alliances to Extend Enron’s Broad Product Offerings – Wholesale and Retail Well Positioned for Multi-Product, Multi-Commodity Opportunities

  9. Latin America

  10. Energy Supply Energy Demand South American Energy Market BRAZIL BRAZIL BRAZIL BRAZIL BOLIVIA BOLIVIA Bahia Bahia PERU PERU Salvador Salvador Bahia Bahia Bahia Bahia Bahia Bahia Bahia Bahia La Paz La Paz • Proven Gas Reserves Have Tripled to 35 Tcf (Bolivia and Argentina) • Large Increase in Brazilian Energy Demand Santa Cruz Santa Cruz Parana Parana PARAGUAY PARAGUAY CHILE CHILE Rio de Janeiro Sao Paulo Sao Paulo ARGENTINA ARGENTINA • Brazilian • Natural Gas Consumption • (Bcf/d) • Brazilian • Gas-Fired Generation • (MW) Buenos Aires Buenos Aires • 2.1 • 10,000 Energy Supply Energy Supply Energy Demand Energy Demand • 0.6 • 450 • 2000E • 2005E • 2000E • 2005E

  11. South American Energy Market Proven Gas Reserves Have Tripled to 35 Tcf (Bolivia and Argentina) Large Increase in Brazilian Energy Demand Market and Supply Now Interconnected Sao Paulo

  12. Elektro Power Distribution Enron’s Unique Market-Driven Energy Position Gaspart 5 Northeast BRAZIL BRAZIL BOLIVIA State LDC’s Enron’s Active Market Participation (est.) - Gas Transportation - Brazilian Gas Distribution - Brazilian Thermal Power Generation (Proj.) Skilled Personnel in Place and Strong Government Relationships Market Making Capabilities; Wholesale Energy Management and Outsourcing Cuiaba 480 MW and Bahia PERU Pipeline Salvador Bahia Bahia Bahia Bahia Transredes 3,093 Miles 480 MW 450 MW La Paz 60% 40% 20% Santa Cruz 1000 MW 450 MW CEG/RIO 2 LDC’s BBPL 1000 MW 1,875 Miles Parana Parana PARAGUAY CHILE Rio de Janeiro Gaspart Sao Paulo 2 South State LDC’s Santa Catarina TGN Marketing Offices Gas Pipeline ARGENTINA Gas Pipeline in Construction Existing Third Party Pipeline CHILE CHILE Electric LDC’s TGS Gas LDC’s Buenos Aires 4,104 Miles Power Plants In Operation Under Development Energy Marketing Activity Gas Power Enron’s Regional Network Complete

  13. High Value Embedded in Enron’s Assets(Value Paid per Unit) • Gas Distribution • Electric Distribution • Customer • MMcf/d • Customer • MWh • $1,700 • $6,800 • $255 • $17 • $1,200 • $185 • $7 • $2,400 • Enron • Other • Comparables • Enron • Other Comparables • Comgas • Enron • Comgas • Enron

  14. Network Evolution Assets Integration • Expansion TGS Transredes Bolivia-To-Brazil Pipeline Cuiaba I CEG/Rio Gaspart Elektro • Cuiaba II • Puerto Suarez • Riogen • Bolivia-To-BrazilPipeline Expansion • Gas LDC Expansions • Argentine MarketMaking (Gas and Power) • Brazilian MarketMaking (Gas and Power) • Cuiaba Fuel Supply • Energy Outsourcing Increasing Returns as Network Develops

  15. Enron South America Integrated, Market-Driven Energy Position in High-Growth, Unserved Market Competitive Regional Network in Place Leveraging Network With Merchant Products and Capabilities

  16. Cuba Enron Caribbean Puerto Plata 185 MW Haina 350 MW Ecoelectrica 507 MW San Juan Gas Jamaica Haiti PuertoRico Dominican Republic Procaribe Progasco Guatemala Puerto Quetzal 110 MW Honduras El Salvador Nicaragua 124 MW Puerto Corinto 71 MW Offices Gas Pipeline in Operations Gas Pipeline in Development Gas Compression Power Marketing Activity Promigas 1,062 Miles Ventane Bahia Las Minas 355 MW Panama Colombia Pipeline Costa Rica Calife Bachaquero Accro Panama Centragas 357 Miles Power Plants In Operation Under Construction Venezuela Colombia Distribution LNG LNG in Development LPG LPG in Construction Electric Strong Physical Asset Position Creates Network Opportunities Active in Every Phase of Downstream Energy Business Lack of Indigenous Fuels Provides Gas Pipeline and LNG Opportunities AC_00_International-15

  17. Mexico Guatemala Honduras Belize Panama Colombia Central America Enron’s Wholesale Energy Network Offices Gas Pipeline in Development Power Plants In Operation Energy Marketing Activity Belize Mexico Under Construction Guatemala Honduras 124 MW Power El Salvador Puerto Quetzal 110 MW Nicaragua Puerto Corinto 71 MW Bahia Las Minas 355 MW Costa Rica Panama Colombia Pipeline Proposed Third Party Transmission Line Panama Colombia Enron’s Energy Network Creates Platform for Merchant Energy Business

  18. Enron CaribbeanRegional Gas/LNG Business Offices Gas Compression LNG Route LNG Route Proposed LPG Route Gas Pipeline in Development Gas Pipeline in Operations Power Plants In Operation LNG LNG in Development LPG LPG in Construction Electric Distribution Companies Connects Regions’ Gas Supply to Oil-Dependent Demand Centers Increases Value of Existing Enron Facilities; Creates New Opportunities High Oil Prices Create Urgency for Customers

  19. EnronGlobal LNG Business Boston Elba Island Qatar Algeria Lake Charles Abu Dhabi Libya Dominican Republic Oman Dabhol Puerto Rico Trinidad Malaysia Venezuela Indonesia Australia World LNG Routes Enron LNG Routes Future Enron LNG Targets • Demand of 14 Bcf/d Growing Rapidly • Estimated 21 Bcf/d in 5 Years • Creation of New Global Routes and Arbitrage Opportunities • Early Market Lead Position

  20. Enron Caribbean and LNG • Significant Gas and LNG Demand in Caribbean Region and Worldwide • Well-Established Enron Network in Place • Leveraging Network to Capture Market Making Activities

  21. Enron India

  22. India Energy Market • Significant Shortage of Indigenous Energy Supply and Infrastructure • Rapidly Growing Gas Consumption; Shortfall Filled by LNG Imports • Large Growth in Power Demand • Energy Regulatory Framework in Place • Natural Gas Market • (Bcf/d) • 6.6 • Supply • Demand • 5.1 • 3.1 • 2.4 • 2.4 • 2.2 • 1997 • 2000 • 2005 Source: Planning Commission, Ministry of Petroleum and Natural Gas

  23. HAZIRA MID TAPTI SOUTH TAPTI MUKTA PANNA Mumbai Enron’s India Energy Network • Dabhol Power • Phase I – 826 MW in Operation • Phase II – 1,624 MW in Operation 2001 • India’s First LNG Harbor and Regasification Terminal • Exploration and Production • Over 3 Tcfe Gross Reserves, With Production of Over 400 Mmcfe/d, Gross • Equity in GAIL, India’s Largest Gas Transmission Company • Metgas Pipeline • Connects Dabhol LNG Plant to Major Industrial Areas • Construction Start and Financing in 2000 Delhi GAIL HBJ Pipeline Ahmadabad Mumbai Office Proposed Office Gas Pipeline Gas Pipeline in Development Power Plants In Operation In Construction Dabhol Hyderabad LNG Supply LNG Terminal and Harbor MetGas Pipeline Bangalore

  24. Dabhol Power PlantPhase I

  25. Dabhol Power Plant Phase II

  26. Enron India Network Opportunities • Assets in Place for Network Expansion in a Growing Market • In-Country Team, Strong Relationships and Exceptional Brand Value Drive Opportunities • Expect Gas and Power Marketing and Energy Services to Lead Merchant Activity

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