Jose LNG Project November, 2000

LNG liquefaction, storage, and export facility in eastern Venezuela –2.1 MMTPA capacity –Approximately 300 MMscfd of net exports, enough for 2000MW To be located in the existing PDVSA-Gas cryogenic complex at Jose –Adjacent to Enron’s ACCRO LPG facilities. Site large enough for three LNG trains Gas supply required, 350 MMscfd (compared to 5700 MMscfd produced daily in Venezuela, mostly associated to oil production) –Bought from PDVSA’s associated gas production (no dedicated source or reserve risk) –World only LNG export project with no exploration/production risk or investment Gas contract with PDVSA at all-in price that includes transportation to Jose –Gas contract and other in-country documents under a PDVSA-Corp guarantee Target LNG markets: –U.S. East Coast Elba Island, Lake Charles, Cove Point, Boston and South Florida (ENE project in Bahamas) –Puerto Rico, Brazil and other Caribbean (Dominican Republic) –Portugal/Spain Estimated all-in capital cost (excluding IDC): $688MM –Enron initial equity of approximately $120-$140MM (65/35 - debt/equity ratio) Enron 50%, PDVSA 25% and other buyers (UF) 25% Project General Overview

Proposed Project Structure LNG Project Gas Supply PDVSA-Gas EPC Contract Turn-Key PDVSA-Corp Guarantee Site & Pier PDVSA-Gas PDVSA-Gas to provide gas supply and site All PDVSA-Gas obligations are backed by parent O&M Contract Turn-Key EE&CC to provide Turn-Key for the project. EPC price and EPC contract in final negotiation. Other potential EPC options to be explored if necessary. Turn-key $580MMApprox. 4% of EPC ENRON to provide O&M services to project. Several options available for adding third parties to O&M Contract. Most O&M activities could be contracted to third parties, while keeping a core senior management team at the project level for relationships and expansions Equity Financing Debt Financing ENEPDVSA Off-Take Agreements $210MM 30% Equity $490MM 70% Equity ENE PDVSA 75%-$157MM 25%-$53MM ENE to continue sell-down strategy to accomplish off- Balance Sheet treatment and MTM. Debt from bank and bond market. Basic assumptions are: T-650; 14-y tenor,; fees of ; coverage ratio 1.50x 25% off-take (75,000MMBtu/d) Net Off-take 300,000MMBtu/d Off-take to be split between ENE & PDVSA 75% off-take (225,000MMBtu/d)

Key Transaction Documents PDVSA Transaction Documents Scope of Transaction Methane Gas Supply to the Plant Sale of NGL back to PDVSA-Gas Rights to Plant Site at Jose Rights to use existing Pier PDVSA Participation in Project (equity option, commercial oversight) Documents Involved Gas Supply Agreement Final, ready to sign LNG Sites & Pier Agmt Usufruct and Servitude Agreements Both final, ready to sign PDVSA Parent Guarantee Final, ready to sign Participation Agreement Near final

Price Exposure Analysis Terminal Services PDVSA Corp. Gas Supply O&M Fee CPI based Off-Take ENE-PDVSA Equity Return Debt Principal/Interest HH flat 1% CPI Basic Price Minimum Price Bonus Structure HH + Basis $ CPI$ 1.00 Flat Pricing to match All inlet gas: Basic price, floor and bonus O&M costs escalation Capital recovery and return (Flat) 70% Flat CPI Various Hedging Instruments ENA MOL EXMAR Leir Hoergh 70% Flat CPI Jose LNG Project LNG Markets EPC Price $ $

Dec Execution all Documents GSA LC - $20MM (construction) EPC - Cancellation Fees for owner and Completion Guarantee for EE&CC Equity commitment - FC may be bridge financing PDVSA equity option starts Off-take final commitment May 2004 Commercial Operations Feb Permits Obtained July 2001 Financial Closing PDVSA Option GSA LC - $30MM (operations) EPC - Performance Guarantee from EE&CC - Up to 7 mos - Project Timeline ENE’s Commitments GSA LC - $1.25MM (pre-construction) GSA LC - $4MM (pre-construction) April 2001 Executed EPC Contract NTP May 2001 Executed O&M Shipping Arrangement O&M - Cancellation Fees Shipping commitments Jan PDVSA Option PDVSA option expires Estimated Key Dates Nov Participation Agreement Completed LNG Off-take - structure established/ final commitment before FC

General Economic Value Drivers Off-take agreements will provide a substantial portion of Enron’s income –Currently working on ability to MTM transaction –Next year income will come from both MTM of transaction of the marketing company level and from trading operations Project company return of approximately 18% (equity at project level) –Excellent return level for equity risk with current structure –Equity sell-downs at promotes are expected to occur before year-end 2001 Expansion rights will provide Enron w/ tool to manage 3rd party supply –Addition trains a clear possibility under current structure and at much lower cost –Sellable rights w/ project company Marketing fee for services provide to PDVSA under Participation Agreement Significant construction profits (assumes EPC by EE&CC) –Expected to be approximately US$39MM, plus contingency Maximize utilization of Enron’s current positions in Elba Terminal and shipping capacity –Elba capacity is approx. 55% of Jose volume (Jose could use 100% of the capacity) –Depending on routes, a significant portion of Enron’s current shipping capacity could be used to move Jose volumes

Next Steps 4th Q’ 2000 extremely pivotal. Scheduled to conclude Venezuela in country agreements, permits, and finalize Elba Island documents Specific near term activities –Complete Jose LNG Venezuela agreements –Finalize Elba Island documents (Doug Arnell and Les Weber) –Advance conversations with El Paso (Cove Point) and CMS (Lake Charles) –Decision on EPC Contractor (EE&CC vis-à-vis third party contractor) –Follow-up with Banks for project financing package (Larry Lawyer and Martin Rees) –Approach possible Equity investors after all key contracts in place (Larry Lawyer) Internal approval process: –Decision on approach for PDVSA’s Participation Agreement (LNG off-take arrangement) –Obtain MTM treatment for transaction –RAC process