UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report: July 4, 1997
(Date of earliest event reported)
ENRON GLOBAL POWER & PIPELINES L.L.C.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13584 76-0456366
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or Identification No.)
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organization)
333 CLAY STREET, SUITE 1800
HOUSTON, TEXAS 77002
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number,
including area code: (713) 853-6220
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ITEM 5. OTHER EVENTS
On July 4, 1997, Ente Nacional Regulador de Gas ("ENARGAS"), the Argentine
regulatory agency, announced its resolution covering the base natural gas
transportation tariffs of Transportadora de Gas del Sur S.A. ("TGS") for the
five-year period commencing January 1, 1998. TGS is an Argentine corporation
which owns and operates a 4,104 mile natural gas pipeline system in Argentina.
TGS is a publicly traded company and is 70% owned by Compa<n~><i'>a de
Inversiones de Energ<i'>a S.A. ("CIESA"), which in turn is 33 1/3% owned by a
subsidiary of Enron Global Power & Pipelines L.L.C. ("EPP"). The ENARGAS
resolution included an up-front, one-time tariff reduction of 6.5% for the
efficiency factor and the framework by which TGS will promote and price future
system expansions. The resolution did not address the investment factor nor
other proposals which could mitigate the impact of the rate reduction.
Under the Argentine Natural Gas Act, every five years ENARGAS is required to
review the tariffs charged to regulated transportation services with the use of
an incentive tariff methodology. The methodology provides for the derivation
of an efficiency factor and an investment factor. The efficiency factor, which
is a reduction to transporters' base tariff rates, is a sharing mechanism
between the transporters and their customers resulting from specific,
quantifiable efficiencies identified by ENARGAS. The investment factor, which
is an increase to the transporters' base tariff, is a funding mechanism
designed to recover the incremental investment in and return on ENARGAS-
approved expansions to be undertaken by the transporter during the established
period.
EPP believes that the concepts ENARGAS has applied are inconsistent with the
letter and spirit of the regulatory framework which was intended to encourage
operational efficiencies. EPP will continue to work with TGS to evaluate the
resolution and its impact on planned future investments.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ENRON GLOBAL POWER & PIPELINES L.L.C.
Date: July 17, 1997 By:/S/ KURT S. HUNEKE
Kurt S. Huneke
President and
Chief Financial Officer
