fw extension petro canada wholesale gas services arrangement 5 years great deal work canadian team renewed outsourcing arrangement petrocanada another 5 years great accomplishment enron canada logistics accounting commercial execution last 3 1 2 years played key role extending deal john original message milnthorp rob sent tuesday march 27 2001 11 21 lavorato john subject extension petro canada wholesale gas services arrangement 5 years john per telecon please see attached details let know require something forwarded rob milnthorp cal ect 02 23 2001 05 11 pm eric ledain 02 23 2001 09 11 rob milnthorp cal ect ect cc subject extension petro canada wholesale gas services arrangement 5 years wednesday president petro canada approved extension wholesale gas services agreement first term expires november 1 2002 incremental 5 years taken get closed keep consistently high level service keep mind easy renew something half way first term extension significant following reasons 1 creates mtm income 2 9 mm cdn net directly attributable costs provide back office services 2 supports deal flow potential incentive arrangement income along production information etc 3 even greater importance provides critical frequently used marketing tool continue build gas power businesses across canada know used petro canada arrangement example services provide marketing canada also us europe tell potential customers provided services customer 3 years liked much already extended agreement five years first term message providing good quality service obviously great credit commercial staff operations accounting staff work petro canada separately advise individuals works account renewal congratulate takes alot effort enchant customer day day year year fact incredibly difficult effectively trial day day service provider numbers extension provided petro canada rebate applied remaining term agreement original base fee original base fee 1 75 mm cdn per year payable monthly rebate offered jan 01 nov 01 458 300 cdn nov 01 nov 02 517 000 cdn fee charged extension term nov 02 nov 03 1 366 000 cdn nov 03 nov 04 1 400 000 cdn nov 04 nov 05 1 435 000 cdn nov 05 nov 06 1 470 000 cdn nov 06 nov 07 1 510 000 cdn thoroughly defined back office costs required provide services 428 700 cdn yr 2000 3 years operating history support projection escalation 2 per year second five year term costs include back office staff allocations salaries benefits rent infrastructure allocation checked allocation houston costs per transaction basis insignificant compared base business transaction levels include commercial staff costs covered incentive arrangement ongoing transaction deal flow discussions wes definition costs certainty arrangement scope allow us mtm income mtm income 2 9 mm cdn includes rebate offered last two years current term reduced annual costs notes 1 defined incentive fee second five year period yet work moment pcog benchmark given much intermediate producers group 40 disappeared revise agreement reflect fact revision incentive fee agreed 2 petro canada sales volumes fall 60 last years levels price reopener remaining term defined fee absolute cost rather per unit rate also reopener price volumes grow 140 today levels petro canada growth strategy gas expected volumes last 6 months increased 7 8 year year 3 peter amended agreement next week