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Attention: OFFICE OF PUBLIC UTILITY REGULATION
DIVISION OF INVESTMENT MANAGEMENT
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Form U-33-S
ANNUAL REPORT
CONCERNING FOREIGN UTILITY COMPANIES
Filed under Section U-33-S of the
Public Utility Holding Company Act of 1935, as amended
for the fiscal year ended December 31, 1996
Filed pursuant to the Public Utility Holding Company Act of 1935 by
ENSERCH Corporation
ENSERCH Center
300 South St. Paul
Dallas, Texas 75201
The Commission is requested to mail copies of all
communications relating to this Annual Report to:
John F. Stephens, Jr.
ENSERCH Corporation
ENSERCH Center
300 South St. Paul
Dallas, Texas 75201
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Annual Report Concerning
Foreign Utility Companies
Page 1
ENSERCH Corporation ("ENSERCH"), a Texas corporation, hereby
files its annual report concerning foreign utility companies to the
Securities and Exchange Commission under Section 33(e) of the Public
Utility Holding Company Act of 1935, as amended (the "Act"), on behalf of
two foreign utility companies: Metrogas S.A. and Compania Mexicana de Gas,
S.A. de C.V.
Item 1 Name, Business Address, Facilities, and Ownership
A. Metrogas S.A.
The address of Metrogas S.A. ("Metrogas") is Edeficio Torre el
Bosque, Av. el Bosque Norte 0177 Piso ll, Las Condes, Chile. Metrogas is a
corporation formed under the laws of the Republic of Chile.
Metrogas owns and operates a natural gas distribution system in
Santiago, Chile. Metrogas distributes or intends to distribute, either
directly or through one or more subsidiaries, natural gas to industrial,
residential, and commercial customers in the greater Santiago area. The
assets of Metrogas consist primarily of "cracking units" suitable for the
manufacture of low-Btu gas and of suitable distribution facilities,
including a 1200-kilometer pipe network. This network requires conversion
and renovation, which Metrogas will conduct, in order to support the
distribution of natural gas rather than manufactured gas. Metrogas
projects that a newly constructed pipeline from Argentina will make natural
gas available in Santiago by May 1997 and that conversion of the existing
Santiago network will permit natural gas service to more than 250,000
customers by 2000.
Lone Star Gas International, Inc. ("LSG International"), a
Texas corporation and wholly-owned subsidiary of ENSERCH, owns ninety-nine
percent (99%) of the voting stock of Lone Star Gas de Chile S.A., a Chilean
corporation ("LSG Chile"). National Pipeline Co., a wholly-owned
subsidiary of ENSERCH, owns the remaining one percent (1%) of LSG Chile.
LSG Chile holds a ten percent (10%) equity interest in Metrogas. The
voting interest that LSG Chile holds in Metrogas is roughly proportional to
its equity interest.
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Annual Report Concerning
Foreign Utility Companies
Page 2
B. Compania Mexicana de Gas S.A. de C.V.
The address of Compania Mexicana de Gas, S.A. de C.V. ("CMG")
is Calle San Nicolas de las Garza Nte. 2901 Colonia Cementos C.P. 64520,
Monterrey N.L. Mexico. CMG is a corporation organized under the laws of
the United Mexican States.
CMG owns a natural gas distribution system in Monterrey, Mexico
and sells natural gas to industrial customers located throughout the
Monterrey area. The company seeks to develop a residential and commercial
natural gas distribution network in several areas in Monterrey. By mid-1997
CMG expects to service, directly or through wholly-owned subsidiaries,
approximately 15,000 residential customers through a natural gas pipeline
network that currently is in the design stage..
Enserch Development Corporation, a wholly-owned subsidiary of
ENSERCH, owns one percent (1%) of the stock of both Enserch de Mexico S.A.
de C.V. ("Enserch Mexico") and Enserch de Monterrey S.A. de C.V. ("Enserch
Monterrey"), both Mexican corporations. National Pipeline Co., a wholly-
owned subsidiary of ENSERCH, owns ninety-nine percent (99%) of the stock of
Enserch Mexico. Enserch Mexico owns ninety-nine percent (99%) of the stock
of Enserch Monterrey, which has acquired a forty-nine percent (49%) equity
interest in CMG.
Item 2 Guarantees of Financial Obligations
A. Metrogas
ENSERCH Corporation has provided a guaranty to Transportudora
de Gas del Norte S.A. (TNG) supporting contractual obligations
of Metrogas; ENSERCH estimates the value of the guaranty
obligation to be $900,000.
B. CMG
ENSERCH Corporation provided a guaranty to Citibank, N.A.
supporting a letter of credit issued on behalf of CMG to Pemex
Gas Y Petroguimca Basica (PEMEX) in order to obtain release of
shares of CMG, which had been pledged to PEMEX. The liability
under the letter of credit is expected to expire in the Fall
of 1997 and is approximately $3.9 million.
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Annual Report Concerning
Foreign Utility Companies
Page 3
Item 3 Technical Services Contracts
A. Metrogas
Metrogas entered a Development and Technical Assistance
Agreement with LSG International dated effective April 15, 1996. LSG
International assigned this agreement to LSG Chile, effective April 16,
1996 and to Enserch International Services, Inc., a Texas corporation and
wholly-owned subsidiary of ENSERCH ("EIS"), effective June 1, 1996.
Under the contract, LSG International is obligated to provide
technical assistance to support the renovation of existing manufactured gas
facilities that Metrogas operates in Chile in order to permit the
distribution of natural gas. LSG International must supply Metrogas with
skilled and trained personnel, including an on-site senior-level manager,
to provide technical assistance on matters of construction design,
procurement of gas supplies, tariff structures and marketing, facilities
operation and maintenance, law compliance, and employee training and
procedures, among others.
Metrogas is obligated to pay service fees to LSG International
equal to the greater of a) three and one-half percent (3.5%) of the sum of
i) operating income of Metrogas, ii) dividend income that Metrogas received
from the GasAndes projects or its successors and assigns, and iii) any
operating income resulting from businesses directly related to natural gas
operations of Metrogas or b) two-hundred fifty percent (250%) of the
salaries and wages of all LSG International personnel providing services
under the agreement.
B. CMG
CMG entered a Development and Technical Assistance Agreement
with EIS on February 1, 1996.
Under the contract, EIS provides technical assistance to CMG in
its effort to expand its Monterrey natural gas distribution facilities.
The services that CMG receives from EIS include technical assistance on
matters such as facility construction, development of rate structures,
procurement of gas supplies, facility operation and maintenance, law
compliance, and personnel training. EIS supplies CMG with the skilled
personnel necessary for such technical assistance, including one on-site
senior-level manager and one on-site technical field engineer.
CMG pays fees to EIS equal to one-hundred percent (100%) of the
salaries, wages, and benefits of all EIS personnel engaged in providing
services under the Development and Technical Assistance Agreement. CMG
also reimburses EIS for all direct travel and other expenses that EIS
incurs and that are associated with its performance under the contract.
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Annual Report Concerning
Foreign Utility Companies
Page 4
EXHIBIT A
Organizational Chart
ENSERCH CORPORATION
______________________________
| | |
| | ENSERCH DEVELOPMENT
LONE STAR GAS INTERNATIONAL, INC. | CORPORATION
(wholly-owned subsidiary | (wholly-owned subsidiary
of | of
ENSERCH CORPORATION) | ENSERCH CORPORATION)
| | |
| | |
LONE STAR GAS CHILE S.A. | ENSERCH DE MEXICO S.A. DE C.V.
(99% of voting shares owned | (1% of stock owned
by | by
LONE STAR GAS INTERNATIONAL, INC.(1)| ENSERCH DEVELOPMENT CORPORATION(2)
| | |
METROGAS S.A. | ENSERCH DE MONTERREY S.A. DE C.V.
(10% equity interest owned | (99% of stock owned
by | by
LONE STAR GAS CHILE S.A.) | ENSERCH DE MEXICO S.A. DE C.V.;
| 1% of stock owned by
| ENSERCH DEVELOPMENT CORPORATION)
| |
| |
| COMPANIA MEXICANA DE GAS S.A. DE C.V.
| ("CMG")
| (contractual rights to purchase
| 49% of CMG stock are owned by
| ENSERCH DE MONTERREY S.A. DE C.V.)
|
|
ENSERCH INTERNATIONAL SERVICES, INC. ("EIS")
(wholly-owned subsidiary of
ENSERCH CORPORATION)
(1) National Pipeline Co., a wholly-owned subsidiary of ENSERCH, owns one
percent (1%) of LSG Chile.
(2) National Pipeline Co. owns ninety-nine percent (99%) of the stock of
Enserch Mexico.
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Annual Report Concerning
Foreign Utility Companies
Page 5
The undersigned company has duly caused this annual report to
be signed on its behalf by the undersigned thereunto duly authorized
pursuant to the requirements of the Public Utility Holding Company Act of
1935. The signature of the undersigned company shall be deemed to relate
only to matters having reference to such company or its subsidiaries.
ENSERCH CORPORATION
Date: April 29, 1997 By: /s/ A. E. Gallatin
A.E. Gallatin
Vice President and Treasurer
