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ENRON AND ENEL SIGN LETTER OF INTENT TO FORM JOINT VENTURE POWER COMPANY IN ITALY
FOR IMMEDIATE RELEASE: Tuesday, June 3, 1997
HOUSTON -- Enron Europe Ltd., a subsidiary of Enron Corp., and ENEL Societa per Azioni (ENEL) announced today that they have signed a non-binding letter of intent to form a 50/50 joint venture company, which would own up to 5,000 megawatts of power plants, currently owned by ENEL, to supply eligible customers in Europe. While specific plants have not been identified for the joint venture, they would represent a combination of single cycle oil and gas fired plants, which would be upgraded to combined cycle gas fired plants. It is anticipated that Enron would serve as fuel manager for the joint venture and provide risk management services to the venture as the market liberalizes. Under the proposed joint venture the newly formed company would sell its power to ENEL until it becomes authorized to supply eligible customers.
It is anticipated that ENEL would provide the operating and maintenance services for the plants owned by the joint venture and the engineering and construction services associated with the conversion of the plants.
"We are delighted to pursue this joint venture with such a strong partner as ENEL and look forward to working together to serve additional customers in the European energy market," said Kenneth L. Lay, chairman and CEO of Enron Corp. at a signing ceremony held in the company's Houston headquarters.
"The joint venture with Enron is a further step towards the enhancement of ENEL's shareholders value and would be a contribution to the liberalisation of the Italian energy market," said Franco Tato, chief executive officer of ENEL. "This association with a strong global energy company could also bring new business opportunities outside of Italy".
With over 650,000 miles of transmission lines, ENEL is the world's second largest electric utility in terms of installed power and number of customers, amounting to 55,106 MW and 28.7 million, respectively. In 1996, ENEL sold 213.8 TWh of electricity with a consolidated turnover of $21.8 billion, resulting in an EBITD and EBIT of some $8.6 billion and $4.9 billion respectively. As of April 30, 1997, the group's work force was 90,606 people.
Enron has an existing presence in Italy through a 45% equity interest in Sarlux, a joint venture with Saras SpA involving the construction, operation and ownership of a 550 megawatt IGCC power plant in Sardinia.
Enron Corp., one of the world's largest integrated natural gas and electricity companies with approximately $15 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest purchaser and marketer of natural gas and the largest non-regulated marketer of electricity in North America; is a leading participant in liberalized energy markets in the United Kingdom and the Nordic Countries; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns a majority interest in Enron Global Power & Pipelines L.L.C., which is owner and manager of operating power plants and natural gas pipelines around the world; is one of the largest independent developers and producers of electricity in the world; and is a major supplier of solar and wind renewable energy worldwide. Enron is traded under the ticker symbol, "ENE."
For additional information please contact:
Diane Bazelides
Enron U.S.
(713) 853-6285
Jackie Gentle
Enron-U.K.
01912140222
Stephano Lucchini
ENEL
(39)685093617
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