<PAGE>   1

 ===============================================================================

                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                               ------------------

                                   FORM 10-Q

[X]            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934   

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

[ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                          COMMISSION FILE NO. 1-13584

                     ENRON GLOBAL POWER & PIPELINES L.L.C.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                                    76-0456366
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                    Identification No.)

     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

                               ------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                                 Yes   x    No

Indicate the number of shares outstanding of each of the issuer's classes of
common shares, as of the latest practicable date:

<TABLE>
<CAPTION>
           CLASS                                OUTSTANDING AS OF JULY 31, 1997
           -----                                -------------------------------
       <S>                                            <C>
       Common Shares                                   26,018,602 shares
</TABLE>

===============================================================================
<PAGE>   2
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                             NO.
                                                                            ----
 <S>                                                                         <C>
 PART I. FINANCIAL INFORMATION
   Item 1. Financial Statements
      Consolidated Statements of Income -- Three Months
       Ended June 30, 1997 and 1996 and Six Months Ended
       June 30, 1997 and 1996 .............................................   1
      Consolidated Balance Sheets -- June 30, 1997 and
       December 31, 1996 ..................................................   2
      Consolidated Statements of Cash Flows -- Six Months
       Ended June 30, 1997 and 1996 .......................................   3
      Consolidated Statements of Changes in Shareholders'
       Equity -- Six Months Ended June 30, 1997 ...........................   4
      Notes to Consolidated Financial Statements ..........................   5
   Item 2. Management's Discussion and Analysis of Financial
      Condition and Results of Operations .................................  11
 PART II. OTHER INFORMATION
   Item 4. Submission of Matters to a Vote of Security
      Holders .............................................................  22
   Item 5. Other Matters ..................................................  22
   Item 6. Exhibits and Reports on Form 8-K ...............................  22
</TABLE>





                                       i
<PAGE>   3
                     ENRON GLOBAL POWER & PIPELINES L.L.C.
                         PART I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                       CONSOLIDATED STATEMENTS OF INCOME
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED               SIX MONTHS ENDED
                                                                      JUNE 30,                         JUNE 30,
                                                           ----------------------------        -----------------------
                                                             1997                1996            1997           1996
                                                           --------            --------        --------       -------- 
 <S>                                                        <C>                 <C>             <C>
 Technical Assistance Fees                                 $  2,954            $  2,803        $  5,850       $  5,308 
 Equity in Earnings of Unconsolidated Subsidiaries:                                                                    
       Pipeline Operations                                    6,761               7,674          14,825         16,529 
       Power Operations                                       4,010               4,132           8,427          7,657 
                                                           --------            --------        --------       -------- 
                                                                                                                       
 Equity in Earnings and Technical Assistance Fees            13,725              14,609          29,102         29,494 
 General and Administrative Expenses                         (1,600)             (1,314)         (3,279)        (2,911) 
 Taxes Other Than Income                                       (201)               (150)           (306)          (293) 
 Interest Expense                                              (407)                 --          (1,343)            (1) 
 Interest Income                                              1,537                 650           2,559            975 
 Other Income (Expense), Net                                    507             (1,119)           1,464        (1,855) 
                                                           --------            --------        --------       -------- 
                                                                                                                       
 Income Before Income Taxes                                  13,561              12,676          28,197         25,409 
 Income Tax (Expense) Benefit                                  (562)             (1,101)           2,810        (2,313) 
                                                           --------            --------        --------       -------- 
                                                                                                                       
 Net Income                                                $ 12,999            $ 11,575        $ 31,007       $ 23,096 
                                                           ========            ========        ========       ======== 
                                                                                                                       
 Net Income Per Common Share                               $   0.50            $   0.48        $   1.22       $   0.96 
                                                           ========            ========        ========       ======== 
                                                                                                                       
 Average Number of Common Shares Used in Computation         26,001              24,051          25,431         24,024 
                                                           ========            ========        ========       ======== 
 
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements.





                                       1
<PAGE>   4
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

                   PART I. FINANCIAL INFORMATION (CONTINUED)
                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
                          CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             JUNE 30,       DECEMBER 31,
                                                               1997            1996
                                                            ---------        ---------
                                                           (UNAUDITED)   
<S>                                                       <C>              <C>
ASSETS                                                                  
Current Assets                                                          
    Cash and cash equivalents                               $  47,895        $  24,582
    Accounts receivable                                         9,734            6,301
    Dividends receivable                                       10,027              ---
    Current portion of notes receivable                         1,413            1,394
    Other current assets                                          912              404
                                                            ---------        ---------
       Total Current Assets                                    69,981           32,681
                                                            ---------        ---------
                                                                        
Investments in and Advances to Unconsolidated                 284,943          298,530
Subsidiaries                                                            
Notes Receivable                                               16,100           12,111
Other                                                           2,299              521
                                                            ---------        ---------
       Total Assets                                         $ 373,323        $ 343,843
                                                            =========        =========
                                                                        
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
Current Liabilities                                                     
    Accounts payable                                          $16,371          $11,277
    Accrued taxes                                               1,646            1,488
       Current portion of note payable                             --           36,583
                                                                   --           ------
       Total Current Liabilities                               18,017           49,348
                                                            ---------        ---------
Deferred Income Taxes                                             364            4,301
Notes Payable                                                  22,892           24,750
Commitments and Contingencies (Note 9)                                  
Shareholders' Equity                                                    
    Common Shares, no par value,                                        
       200,000,000 shares authorized                                    
       and 26,018,402 and 24,392,352                                    
       shares issued and outstanding, respectively            268,020          219,816
    Retained earnings                                          64,030           45,628
                                                            ---------        ---------
       Total Shareholders' Equity                             332,050          265,444
                                                            ---------        ---------
       Total Liabilities and Shareholders' Equity           $ 373,323        $ 343,843
                                                            =========        =========
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements.





                                       2
<PAGE>   5
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

                   PART I. FINANCIAL INFORMATION (CONTINUED)
                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    SIX  MONTHS ENDED
                                                                        JUNE  30,
                                                                ------------------------
                                                                  1997            1996
                                                                ---------      ---------
<S>                                                            <C>           <C>
Cash Flows From Operating Activities:
Reconciliation of net income to net cash flows from
  operating activities
    Net income                                                  $ 31,007       $ 23,096
    Equity in earnings of unconsolidated subsidiaries            (23,252)       (24,186)
    Distributions from unconsolidated subsidiaries                26,812         16,249
    Deferred income taxes                                         (3,937)           992
    Changes in components of working capital:
       Accounts receivable                                        (3,433)           132
       Accounts payable                                             5,094         1,056
       Accrued taxes                                                  158          (919)
    Other, net                                                     (2,251)        1,587
                                                                ---------      ---------
Net Cash Flows from Operating Activities                           30,198        18,007
                                                                ---------      ---------

Cash Flows from Investing Activities:
Loan to unconsolidated subsidiary                                 (4,043)             --
                                                                ---------      ---------
Net Cash Flows Used in Investing Activities                       (4,043)             --
                                                                ---------      ---------

Cash Flows From Financing Activities:
    Common shares issued                                          48,204            179
    Loan from parent                                               4,043             --
    Loan from affiliate                                            5,374             --
    Payment of long-term debt                                    (47,858)             --
    Dividends paid                                               (12,605)        (9,526)
                                                                ---------      ---------
Net Cash Flows Used in Financing Activities                       (2,842)        (9,347)
                                                                ---------      ---------

Increase in Cash and Cash Equivalents                              23,313         8,660
Cash and Cash Equivalents, Beginning of Period                     24,582        23,364
                                                                ---------      ---------
Cash and Cash Equivalents, End of Period                        $  47,895      $ 32,024
                                                                =========      =========

Supplemental Cash Flow Information:
Cash Paid for Income Taxes                                      $   1,086      $  2,272
                                                                =========      =========
Cash Paid for Interest                                          $   1,333      $     --
                                                                =========      =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.





                                       3
<PAGE>   6
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

                   PART I. FINANCIAL INFORMATION (CONTINUED)
                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>
                                                                                 SHAREHOLDERS' EQUITY 
                                                                   -----------------------------------------------
                                                                    COMMON             RETAINED
                                                                    SHARES             EARNINGS             TOTAL
                                                                   --------            --------           --------
<S>                                                                <C>                 <C>                <C>
Balance at December 31, 1996                                       $219,816             $45,628           $265,444
Net income                                                               --              31,007             31,007
Dividends                                                                --             (12,605)           (12,605)
Exercise of purchase option by Enron Corp.                           47,000                  --             47,000
Issuances for share options                                           1,204                  --              1,204
                                                                   --------            --------           --------
Balance at June 30, 1997 (Unaudited)                               $268,020            $ 64,030           $332,050
                                                                   ========            ========           ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.





                                       4
<PAGE>   7





                     ENRON GLOBAL POWER & PIPELINES L.L.C.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED



                     ENRON GLOBAL POWER & PIPELINES L.L.C.

                   PART I. FINANCIAL INFORMATION (CONTINUED)
                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

 Enron Global Power & Pipelines L.L.C., a Delaware limited liability company,
and its wholly owned subsidiaries (EPP), own interests in natural gas pipeline
systems in Argentina and Colombia, two power plants in the Philippines, a power
plant in Guatemala and a power plant in the Dominican Republic. EPP's pipeline
operations in Argentina are conducted through its wholly owned subsidiary,
Enron Pipeline Company -- Argentina S.A. (EPCA). EPCA owns 331/3% of Compania
de Inversiones de Energia S.A. (CIESA), which in turn owns 70% of
Transportadora de Gas del Sur S.A. (TGS), the entity that owns the pipeline
system. EPP's pipeline operations in Colombia are conducted through its 49%
limited partnership interest in Centragas -- Transportadora de Gas de la Region
Central de Enron Development & Cia., S.C.A. (Centragas). EPP's power operations
in the Philippines are conducted through its wholly owned subsidiary, Enron
Power Philippines Corp. (EPPC). EPPC owns 50% of the outstanding stock of Subic
Power Corp. (SPC) and Batangas Power Corp. (BPC), the entities that own the
respective power plants. The Guatemala power operations are conducted through
EPP's 50% ownership interest in Puerto Quetzal Power Corp. EPP's Dominican
Republic power operations are conducted through its 50% partnership interest in
Smith/Enron Cogeneration Limited Partnership (SECLP) and Smith/Enron O&M
Limited Partnership (SEOM).

2. ACQUISITIONS

General

 Acquisitions of projects from Enron Corp. or its affiliates (collectively, 
Enron) are transactions between entities under common control that are
accounted for similar to the pooling of interests method of accounting using
the historical carryover basis and restating historical results to include the
results of acquired projects. There were no acquisitions during the six months
ended June 30, 1997.

CIESA

 The acquisition of an additional interest in CIESA from a third party occurred
in July 1996. Detailed below are summarized pro forma results of operations for
EPP as though the acquisition of CIESA had occurred on January 1, 1996.

<TABLE>
<CAPTION>
                                    THREE MONTHS ENDED        SIX MONTHS ENDED
                                      JUNE 30, 1996            JUNE 30, 1996 
                                   -------------------      --------------------
<S>                                <C>                     <C>
Equity in Earnings and
       Technical Assistance Fees   $       16,554           $      33,376
Net Income                                 12,632                  25,208
Net Income per Common Share        $         0.53           $        1.05
</TABLE>

Centragas

During 1996, EPP recorded approximately $4.7 million of equity in earnings from
Centragas, approximately $2.8 million of which related to an early completion
bonus. In accordance with the Transportation Services Contract dated May 12,
1994, between Centragas and Empresa Colombiana de Petroleos (Ecopetrol), the
state-owned oil company of Colombia, Ecopetrol was obligated to pay to
Centragas an early completion bonus if certain conditions





                                       5
<PAGE>   8
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED



were satisfied. Centragas believed that all of these conditions were satisfied;
however, Ecopetrol contested certain aspects of the early completion bonus.
Centragas asserted its claim to such bonus through an amicable compoundment
dispute resolution process whereby an independent engineering firm, chosen by
Centragas and Ecopetrol, would decide the issue. On June 4, 1997, the
independent engineering firm resolved the dispute in favor of Ecopetrol. As a
result of this decision, EPP recorded a $1.9 million net reduction to equity in
earnings from Centragas in the first six months of 1997.

3. BASIS OF PRESENTATION

 The consolidated financial statements included herein have been prepared by
EPP without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, the consolidated financial statements reflect
all adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial results for the interim periods. Certain
information and notes normally included in financial statements prepared in
accordance with generally accepted accounting principles (GAAP) have been
condensed or omitted pursuant to such rules and regulations. However, EPP
believes that the disclosures are adequate to make the information presented
not misleading. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in EPP's Annual Report on Form 10-K for the year ended December 31,
1996.

 The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from the
estimates.

 EPP records as cash equivalents all highly liquid short-term investments with
original maturities of three months or less. From time to time, EPP invests
excess funds with Enron under promissory notes payable on demand at market
interest rates. At June 30, 1997, approximately $46.9 million was invested
under such notes. Such amounts are classified as cash equivalents.

 All monetary amounts presented in tables herein are expressed in thousands,
except per share amounts.

 Certain prior period amounts have been reclassified to conform with the
current presentation.

4. SHAREHOLDERS' EQUITY

 On March 5, 1997, Enron exercised an option, which was granted to Enron in
connection with Enron providing the financing for the additional EPP interest
in CIESA acquired in July 1996 (the Option) (see Note 2). The Option allowed
Enron to purchase $47.0 million of EPP common shares at the average market
price for the 20 trading days immediately preceding the second trading day
prior to the exercise (approximately 1.6 million EPP common shares). A portion
of the proceeds was used to repay the $36.6 million note payable to Enron (see
Note 6).

    On June 16, 1997, EPP paid a quarterly cash dividend of $0.25 per share.

5. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES

 EPP's investments in and advances to unconsolidated subsidiaries and the
changes in such balances are as follows:

<TABLE>
<CAPTION>
                                          PIPELINE          POWER            TOTAL
                                          --------          -----            -----
 <S>                                      <C>              <C>             <C>
 Balance at December 31, 1996             $198,204         $100,326        $298,530
 Equity in Earnings                         14,825            8,427          23,252
 Distributions Declared                    (10,027)              --         (10,027)
 Distributions Made                        (18,812)          (8,000)        (26,812)
                                          --------         --------        --------
 Balance at June 30, 1997                 $184,190         $100,753        $284,943
                                          --------         --------        --------
</TABLE>





                                       6
<PAGE>   9
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED




 At June 30, 1997, EPP's share of undistributed earnings of its pipeline and
power subsidiaries totaled approximately $6.3 million and $22.1 million,
respectively. At June 30, 1997, SECLP has undistributed earnings of $6.2
million and is precluded from making distributions due to arrearages on
principal and interest payments related to the cost overrun loans (COLs) (see
Note 8) and maintenance funding requirements.

 In the first six months of 1997, EPPC received $6.5 million in dividends from
its Philippine power operations, EPCA received $14.2 million in dividends from
CIESA and EPP received $1.5 million in dividends from its Guatemala power plant
operations. During the first six months of 1997, Centragas declared dividends
of approximately $29.9 million, approximately $4.6 million of which was
received during the first six months of 1997 and $10.0 million of which is
expected to be received by EPP incrementally through December 1997. Equity in
earnings are net of amortization of excess investment related to CIESA and
SECLP/SEOM.

6. NOTES PAYABLE

 On March 5, 1997, EPP received $47.0 million in connection with the exercise
of Enron's option to acquire EPP common shares (see Note 4). EPP used a portion
of the proceeds from the exercise of the option to repay the $36.6 million note
payable to Enron.

 In the first six months of 1997, EPP borrowed $4.0 million from Enron to loan
to SECLP (see Note 8).

 In the first six months of 1997, EPCA repaid $11.3 million of the $24.8
million borrowed from Centragas, predominantly with proceeds from repayment of
loans made to, and a loan from, Enron in the amount of $5.9 million and $5.4
million, respectively (see Note 3).

 On July 22, 1997, EPCA repaid the $5.4 million loan to Enron.

7. SUPPLEMENTAL CASH FLOW INFORMATION

 The first six months of 1996 include the issuance of approximately 3.5 million
EPP common shares in exchange for assets with a carryover basis totaling $62.5
million related to the acquisitions of Centragas, SECLP and SEOM. There were no
noncash transactions in the first six months of 1997.

8. NOTES RECEIVABLE

 In the first six months of 1997, EPP loaned approximately $8.6 million to
Enron in the form of a note receivable. The note bore interest at 5.4% payable
quarterly and was payable on demand. The note was converted to the one-month
London Interbank Offering Rate with principal due on demand and is included in
cash and cash equivalents (see Note 3).

 During the first six months of 1997, EPP made additional COLs to SECLP in the
amount of $4.0 million for construction-related items. As of June 30, 1997, the
COLs and past due interest payments total in the aggregate $14.6 million. The
COLs bear interest at 13.5% and are due in semiannual principal and interest
payments through December 15, 2005. As of June 30, 1997, past due principal and
interest on the COLs total $1.7 million and $1.6 million, respectively, of the
$14.6 million and bear interest at 15.5%.

 In July 1997, EPP made additional COLs to SECLP in the amount of $0.3 million
with the same terms as the previous COLs.

9. COMMITMENTS AND CONTINGENCIES

 EPP and subsidiaries, in the ordinary course of business, are defendants in
various lawsuits and administrative proceedings before various courts and
governmental agencies. Management believes that the final outcome of these





                                       7
<PAGE>   10
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED



proceedings, individually and in the aggregate, will not have a material
adverse impact on EPP's financial position or results of operations.

Argentina

GdE Request

 TGS received and denied a request from Gas del Estado S.E. (GdE), a company
owned and operated by the Argentine government, for the reimbursement of
approximately $23 million paid by GdE under purchase orders issued for the
construction of two compressor plants. GdE submitted this matter for resolution
to Ente Nacional Regulador del Gas (ENARGAS), the Argentine federal gas
regulatory entity, but ENARGAS concluded that it lacks jurisdiction to
adjudicate the dispute. In April 1996, GdE filed a legal action seeking
reimbursement from TGS of the $23 million. TGS has accrued approximately $4.8
million as property, plant and equipment based on its estimate of construction
costs of similar plants. TGS has thoroughly answered the demand and is refusing
the claim.

 TGS has filed a claim against GdE and the Argentine government seeking the
reimbursement of amounts paid by TGS in connection with the registration and
payment of certain easements. On October 7, 1996, the Executive Branch, through
Decree No. 1,136/96, created a contribution fund, as provided for in the
license to transport natural gas through the southern Argentine gas pipeline
system granted to TGS in December 1992, to assume GdE's obligations for paying
easements and any other compensation to land owners for an initial five-year
period, beginning with privatization. ENARGAS has started managing the above
mentioned fund, which is financed by a special charge included in the
transportation rates and reimbursed to ENARGAS. TGS expects to recover the
amounts paid related to such easement. As of June 30, 1997, the total amount
sought by TGS is approximately $3.4 million.

Regulatory Matters

 On July 4, 1997, ENARGAS announced its resolution covering the base natural
gas transportation tariffs of TGS for the five-year period commencing January
1, 1998. 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 systems expansions. The resolution did not address the
investment factor nor other proposals which could partially mitigate the impact
of the rate reduction.

 Under the Argentine Natural Gas Act, every five years ENARGAS is required to
review the tariffs charged for 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.

Dominican Republic

 SECLP is currently involved in an International Chamber of Commerce
arbitration proceeding against Corporacion Dominicana de Electricidad (CDE),
the government agency which provides electric services to the Dominican
Republic, and the Dominican Republic Government (DR Government). In SECLP's
earlier pleadings in the arbitration proceedings, SECLP has formally alleged
that CDE owes approximately $19.4 million in past due amounts under the
Electric Energy Supply and Sales Contract dated July 26, 1993, as amended,
among SECLP, CDE and the DR Government (Puerto Plata Energy Supply Contract), a
claim which CDE disputes. SECLP has





                                       8
<PAGE>   11
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED



reserved the right to update its pleadings prior to a final arbitration hearing
date to include the then current amount of the alleged receivable. As of July
31, 1997, SECLP believes that the total receivable is approximately $30
million. CDE has alleged that SECLP owes approximately $13.6 million in delay
damages to CDE pursuant to the Puerto Plata Energy Supply Contract. In addition
to CDE's claims, the DR Government has alleged that its guaranty of CDE's
obligations under the Puerto Plata Energy Supply Contract and the $24 million
letter of credit furnished by the DR Government are void because such
commitments were not approved by the Congress of the Dominican Republic. At the
request of the DR Government, the arbitration tribunal has requested that SECLP
refrain from drawing on the letter of credit while the arbitration is underway.
In the arbitration proceeding, SECLP has denied the claims of CDE and the DR
Government and is defending against such claims, which defense includes the
fact that the claim for delay damages was previously waived by CDE and the DR
Government in an earlier contractual undertaking. SECLP believes that it has
strong legal and factual defenses and is vigorously pursuing its claims
against, as well as contesting the claims brought by CDE and the DR Government.
SECLP anticipates a decision by the arbitration panel by the end of 1997. While
the arbitration proceeding is ongoing, SECLP and CDE have begun informal and
preliminary discussions to negotiate a settlement of their dispute. Although no
assurances can be given, EPP believes that the ultimate resolution of this
matter will not have a material adverse effect on EPP's financial position or
results of operations.

 On October 5, 1994, Hotelera del Atlantico, S.A. (Hotelera), the owner of a
hotel located near the Puerto Plata Plant in the Dominican Republic (Puerto
Plata Plant), initiated an action against SECLP in the Dominican Republic,
requesting damages in excess of 1.5 billion pesos (approximately $108 million
based on a conversion rate of 13.83 pesos/U.S. dollar) and a penalty of 50,000
pesos (approximately $3,600) for each day SECLP continued to operate the Puerto
Plata Plant after the action was initiated. Hotelera alleges that physical
damage and nuisance were caused to the hotel by the operation of the Puerto
Plata Plant prior to December 15, 1994. On December 15, 1994, an agreement
between the parties was reached and a settlement agreement was signed
(Settlement Agreement). However, on September 4, 1995, Hotelera filed a
petition with the Dominican Republic Council of Reconciliation and Arbitration
alleging, among other things, that the environmental guidelines of the World
Bank had not been followed by SECLP as agreed to in the Settlement Agreement.
SECLP has no reason to believe that it has not complied with the World Bank
guidelines and is aggressively defending against such claims. While Enron has
agreed to indemnify EPP from any changes in investment value due to the
financial impact to the project of the Hotelera dispute, an adverse decision in
the Hotelera dispute may impact EPP's earnings from SECLP. Although no
assurances can be given, EPP believes that the ultimate resolution of this
matter will not have a material adverse effect on EPP's financial position or
results of operations.

 SECLP, General Electric Company (GE), Raytheon Engineers & Constructors
(Raytheon), Enron Power Construction Company and certain subcontractors and
insurers have been involved in discussions covered by a confidentiality
arrangement relating to claims arising from the design, construction, start-up,
testing and operation of the Puerto Plata Plant. A settlement of claims has
been agreed to between SECLP, GE and Raytheon. While Enron has agreed to
indemnify EPP from any changes in the investment value due to the potential
financial impact of these settlements on the project, the settlements could
impact EPP's earnings from SECLP. Although no assurances can be given, EPP
believes that the ultimate resolutions of these matters will not have a
material adverse effect on EPP's financial position or results of operations.

 Enron is obligated to fund certain amounts to SECLP associated with
construction-related items and other issues. Pursuant to the purchase
arrangement regarding SECLP between subsidiaries of Enron and EPP, if required
to fund such amounts, Enron will loan funds as COLs to SECLP through EPP. The
Purchase Agreement among EPP, Enron International Inc. and Enron Holding
Company L.L.C. dated June 17, 1996, includes provisions that may require an
adjustment to the purchase price by December 31, 1997, depending upon the
resolution of certain contingencies, including the final amount of additional
COLs and collection of certain receivables ($2.8 million) by SECLP from CDE.
Any purchase price adjustments may be settled in EPP common shares or cash.
Although no assurances can be given, EPP believes that the ultimate resolution
of this matter will not have a material adverse effect on EPP's financial
position or results of operations.





                                       9
<PAGE>   12
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED



Philippines

 At June 30, 1997, BPC had a value added tax (VAT) receivable of approximately
$6.0 million. The realization of the VAT receivable requires the attainment of
VAT exemption from the Bureau of Internal Revenue (BIR), the Philippine tax
authority. BPC received confirmation of VAT exemption through BIR ruling No.
43-97 dated May 15, 1997. EPP believes that the VAT receivable will be realized
either as a credit against future tax liabilities or a refund from BIR and/or
National Power Corporation, the primary electric power supplier in the
Philippines, and that the full amount of the VAT receivable will be recovered.

10. DEFERRED INCOME TAXES

 During the first six months of 1997, EPP reversed a reserve of approximately
$4.0 million for certain Philippine withholding taxes based upon the repeal of
a U.S. tax law which enabled EPP to alter its tax planning strategies. Under
the new strategies, EPP believes that such cash will ultimately be received
without incurring such withholding taxes and, accordingly, management believes
that a liability for such withholding taxes is no longer required.

11. DERIVATIVE FINANCIAL INSTRUMENTS

 During the first six months of 1997, EPP entered into forward purchase
contracts (Contracts) on Colombian pesos with a notional value of $24.6 million
scheduled to settle between late 1997 and early 1998. EPP entered into these
Contracts to offset potential fluctuations in planned equity earnings from
Centragas resulting from changes in the peso exchange rate. Such changes can
cause U.S. GAAP income to vary by impacting Colombian tax expense and foreign
exchange gains or losses on peso-denominated monetary assets and liabilities.
These Contracts do not hedge specific transactions, assets or liabilities and,
accordingly, are marked to market with gains or losses reported as other income
(expense), net. Gains or losses on the termination, sale or maturity of these
Contracts will be reported as other income (expense), net. These Contracts
generated approximately $1.4 million of income during the first six months of
1997, which is included in other income (expense), net.

12. EARNINGS PER SHARE

 In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share" effective for interim and annual periods beginning after December 15,
1997. This statement replaces primary earnings per share (EPS) with a newly
defined basic EPS and modifies the computation of diluted EPS. EPP's basic and
diluted EPS computed using the requirements of SFAS No. 128 are the same as the
currently disclosed primary EPS amounts.

13. PROPOSED MERGER

 On May 14, 1997, Enron submitted an offer to the Oversight Committee (composed
of three non-Enron-affiliated directors) of the Board of Directors of EPP
whereby Enron would purchase for $32 per share all outstanding EPP common
shares not already owned by Enron. Under the proposal, Enron would issue Enron
common shares in exchange for the EPP common shares. The merger proposal is
currently being evaluated by EPP's Oversight Committee.





                                       10
<PAGE>   13
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

                   PART I. FINANCIAL INFORMATION (CONTINUED)
                ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PRIMARY ASSETS AND SOURCES OF EARNINGS AND CASH

 The primary assets of Enron Global Power & Pipelines L.L.C. ("EPP"), a
Delaware limited liability company which is approximately 52% owned by Enron
Corp. (together with its subsidiaries, "Enron") at June 30, 1997, are its
interests in 50% or less owned companies ("Project Companies"), which it holds
directly or indirectly through wholly owned subsidiaries. EPP accounts for its
interests in the Project Companies under the equity method of accounting and
records its proportionate share of the earnings or losses of the Project
Companies. The operations of the Project Companies are EPP's primary source of
earnings. EPP also receives technical assistance fees, paid by Project
Companies to certain wholly owned subsidiaries of EPP, primarily by
Transportadora de Gas del Sur S.A. ("TGS") to Enron Pipeline Company --
Argentina S.A. ("EPCA"). Dividends paid by the Project Companies are EPP's
primary source of cash. Declaration and payment of such dividends are at the
sole discretion of the boards of directors of the Project Companies and are
subject to certain restrictions, including, among others, each Project
Company's operating profitability, restrictions on the distribution of cash
under applicable credit agreements and government imposed currency
restrictions. See "Liquidity and Capital Resources of EPP -- Primary Sources of
Cash" for further discussion regarding cash.

RESULTS OF OPERATIONS OF EPP

GENERAL

 For the six months ended June 30, 1997, EPP's equity in earnings and technical
assistance fees from its Argentine and Philippine operations constituted
approximately 70% and 17%, respectively, of EPP's equity in earnings and
technical assistance fees. As of June 30, 1997, Argentine and Philippine assets
accounted for approximately 49% and 19%, respectively, of EPP's assets. As a
result, if the Argentine or Philippine operations were materially and adversely
affected, EPP's financial condition and results of operations could be
materially and adversely affected. See "Pipeline Operations" and "Power
Operations" below for the results of operations of EPP's Project Companies.

 Acquisitions of projects from Enron are transactions between entities under
common control that are accounted for similar to the pooling of interests
method of accounting using the historical carryover basis and restating
historical results to include the results of acquired projects. There were no
acquisitions during the six months ended June 30, 1997.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 VS. THE THREE
MONTHS ENDED JUNE 30, 1996

 EQUITY IN EARNINGS AND TECHNICAL ASSISTANCE FEES.  Equity in earnings and
technical assistance fees decreased $0.9 million (6%) in the second quarter of
1997 compared to the second quarter of 1996. The decrease is primarily due to
decreased earnings in Centragas -- Transportadora de Gas de la Region Central
de Enron Development & Cia., S.C.A. ("Centragas") attributable to the reversal
of the early completion bonus from the unfavorable amicable compoundment
decision (see Note 2 to EPP's financial statements and notes thereto). This
decrease was partially offset by earnings resulting from the increased
ownership in Compania de Inversiones de Energia S.A. ("CIESA").

 GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $0.3 million (22%) during the second quarter of 1997 compared to the
second quarter of 1996 primarily as a result of the expiration of an agreement
requiring reimbursement of certain expenses.





                                       11
<PAGE>   14
 INTEREST EXPENSE. Interest expense increased $0.4 million (100%) during the
second quarter of 1997 compared to the second quarter of 1996 primarily due to
interest expense associated with the debt incurred in obtaining the additional
ownership of CIESA in July 1996.

 INTEREST INCOME. Interest income increased $0.9 million (136%) during the
second quarter of 1997 compared to the second quarter of 1996 primarily due to
interest earned from the Dominican Republic cost overrun loans (see Note 8 to
EPP's financial statements and notes thereto).

 OTHER INCOME (EXPENSE), NET. Other income (expense), net, represented income
of $0.5 million for the second quarter of 1997 and expense of $1.1 million for
the second quarter of 1996. The $0.5 million of income in 1997 was primarily
attributable to a gain recognized from forward contracts used to mitigate
foreign exchange risk in Colombia. The 1996 expense primarily represents
acquisition costs incurred for the Colombia and the Dominican Republic
projects.

 INCOME TAX (EXPENSE) BENEFIT. The income of EPP is not taxable to EPP;
however, EPCA and Enron Power Philippines Corp. ("EPPC"), both wholly owned
subsidiaries of EPP, are taxable entities in their respective local
jurisdictions. The effective tax rate paid by these subsidiaries is less than
the statutory rate because a majority of the income of these subsidiaries
relates to ownership of equity investments, which is not subject to tax;
however, EPCA is subject to taxes (currently 33%) primarily on the technical
assistance fees received from TGS, net of interest expense. Dividends paid to
EPP from Centragas are subject to certain withholding taxes of 7%.

 Income tax expense decreased $0.5 million (49%) for the second quarter of 1997
compared to the second quarter of 1996 primarily due to the elimination of
certain Philippine withholding taxes after the one-time reversal of a reserve
for certain Philippine withholding taxes in the first quarter of 1997. This
reversal of a reserve for certain Philippine withholding taxes was based upon
the repeal of a U.S. tax law which enabled EPP to alter its tax planning
strategies. Under the new strategies, EPP believes that such cash will
ultimately be received without incurring these withholding taxes and,
accordingly, management believes that a liability for these withholding taxes
is no longer required.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 VS. THE SIX MONTHS
ENDED JUNE 30, 1996

 EQUITY IN EARNINGS AND TECHNICAL ASSISTANCE FEES.  Equity in earnings and
technical assistance fees decreased $0.4 million (1%) in the first six months
of 1997 compared to the first six months of 1996. The decrease is primarily due
to decreased earnings in Centragas attributable to the reversal of the early
completion bonus from the unfavorable amicable compoundment decision (see Note
2 to EPP's financial statements and notes thereto). This decrease was partially
offset by the earnings resulting from the increased ownership in CIESA and
increased earnings in the Philippines. The increased earnings in the
Philippines are primarily a result of increased revenues due to more efficient
operations.

 GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $0.4 million (13%) for the first six months of 1997 compared to the
first six months of 1996 primarily as a result of the expiration of an
agreement requiring reimbursement of certain expenses.

 INTEREST EXPENSE. Interest expense increased $1.3 million (100%) for the first
six months of 1997 compared to the first six months of 1996 primarily due to
interest expense associated with the debt incurred in obtaining the additional
ownership of CIESA in July 1996.

 INTEREST INCOME. Interest income increased $1.6 million (162%) for the first
six months of 1997 compared to the first six months of 1996 primarily due to
interest earned from the Dominican Republic cost overrun loans (see Note 8 to
EPP's financial statements and notes thereto).

 OTHER INCOME (EXPENSE), NET. Other income (expense), net, represented income
of $1.5 million for the first six months of 1997 and expense of $1.9 million
for the first six months of 1996. The $1.5 million of income in





                                       12
<PAGE>   15
1997 was primarily attributable to a gain recognized from forward contracts
used to mitigate foreign exchange risk in Colombia. The 1996 expense primarily
represents acquisition costs incurred for the Colombia and the Dominican
Republic projects.

 INCOME TAX (EXPENSE) BENEFIT. Income taxes decreased $5.1 million for the
first six months of 1997 compared to the first six months of 1996 primarily due
to the one-time reversal of a reserve for certain Philippine withholding taxes
and the elimination of accrued Philippine withholding taxes after the one-time
reversal in the first quarter of 1997 based upon the repeal of a U.S. tax law
which enabled EPP to alter its tax planning strategies. Under the new
strategies, EPP believes that such cash will ultimately be received without
incurring these withholding taxes and, accordingly, management believes that a
liability for these withholding taxes is no longer required.

LIQUIDITY AND CAPITAL RESOURCES OF EPP

PRIMARY CASH REQUIREMENTS

 The primary cash requirements of EPP include the payment of dividends to its
shareholders and the payment of general and administrative expenses, including
salaries, overhead, debt service obligations and costs incurred under the
Administrative Services and Cost Sharing Agreements between Enron and EPP. EPP
may also use cash to satisfy its payment obligations, if any, under various
shareholder and credit agreements relating to the Project Companies and under a
Master Contribution Agreement among EPP, Enron and certain of their
subsidiaries (the "Contribution Agreement"). Pursuant to the Contribution
Agreement, Enron maintains certain commitments on behalf of EPP for the benefit
of certain Project Companies, as required by project lenders and certain other
third parties. In most instances, EPP has agreed to indemnify Enron against
liabilities that may be incurred under such commitments. Although these
indemnity obligations could result in certain otherwise nonrecourse liabilities
becoming recourse to EPP, EPP believes the events which would trigger liability
are remote, and therefore does not expect these obligations to create any
additional liability. If, however, EPP were required to make significant
payments to Enron under the Contribution Agreement, EPP believes it would have
adequate cash resources, would be able to obtain financing for such payments
from Enron or other sources or would be able to cause its subsidiaries to pay
to EPP cash dividends sufficient to make such payments. However, there can be
no assurance that sufficient cash, dividends or funds from other sources would
be available for such purpose.

 On June 16, 1997, EPP paid a quarterly dividend of approximately $6.5 million,
or $0.25 per share.

PRIMARY SOURCES OF CASH

 Primary sources of cash for EPP consist of cash on hand, dividends from the
Project Companies, technical assistance fees and long-term loans of project
cash balances which are currently restricted by local regulations from being
declared as dividends. The ability of the Project Companies to pay dividends
will be dependent on the future earnings and debt repayment obligations of such
subsidiaries, dividend restrictions included in credit agreements at the
project level, applicable currency restrictions, income and other taxes,
applicable laws and the declaration of dividends by the boards of directors of
each of the Project Companies. Project financings typically require that
certain cash reserves be established at each Project Company and that certain
additional capital and legal requirements be satisfied before the Project
Company may pay dividends to its shareholders. However, each of EPP's
subsidiaries has a stated dividend policy, set forth in its shareholders
agreement, of maximizing after-tax cash distributions to shareholders after
taking into consideration capital requirements and applicable legal
requirements. In the future, the Project Companies may also borrow funds or
otherwise accept encumbrances on their earnings resulting in further possible
constraints on their ability to pay dividends to EPP.

 On March 5, 1997, EPP received $47.0 million in connection with the exercise
by Enron of its option to acquire EPP common shares ("Common Shares"). EPP used
a portion of the proceeds from this option exercise to repay a $36.6 million
note payable to Enron.





                                       13
<PAGE>   16
 In the first six months of 1997, EPP loaned approximately $8.6 million to
Enron in the form of a note receivable. The note bore interest at 5.4% payable
quarterly and was payable on demand. The note was converted to the one-month
London Interbank Offering Rate with principal due on demand.

 During the first six months of 1997, EPP made additional COLs to SECLP in the
amount of $4.0 million for construction-related items. As of June 30, 1997, the
COLs and past due interest payments total in the aggregate $14.6 million. The
COLs bear interest at 13.5% and are due in semiannual principal and interest
payments through December 15, 2005. As of June 30, 1997, past due principal and
interest on the COLs total $1.7 million and $1.6 million, respectively, of the
$14.6 million and bear interest at 15.5%.

 In the first six months of 1997, Subic Power Corp. ("Subic") and Batangas
Power Corp. ("Batangas") paid $3.0 million and $10.0 million in dividends,
respectively, of which EPPC received approximately $6.5 million. EPCA received
approximately $14.2 million in dividends from CIESA in the first six months of
1997. EPP received approximately $1.5 million in dividends from Puerto Quetzal
Power Corp. ("PQPC") in the first six months of 1997. During the first six
months of 1997, Centragas declared dividends of approximately $29.9 million,
approximately $4.6 million of which was received during the first six months of
1997 and $10.0 million of which is expected to be received by EPP incrementally
through December 1997. SECLP and SEOM paid no dividends during the first six
months of 1997.

LONG-TERM FINANCING POLICY

 EPP's business strategy is to generate long-term growth in earnings per share,
dividends and cash flow by acquiring interests in additional power and natural
gas pipeline projects from Enron and third parties. EPP currently expects to
fund any such acquisitions from Enron by issuing additional Common Shares and
to fund acquisitions from third parties with Common Shares, cash or debt. EPP
believes that it will have sufficient cash to meet its obligations for the
foreseeable future.

RECENT EVENTS

 On July 4, 1997, Ente Nacional Regulador del Gas ("ENARGAS"), the Argentine
federal gas regulatory entity, announced its resolution covering the base
natural gas transportation tariffs of TGS for the five-year period commencing
January 1, 1998.  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 systems expansions.  The resolution did not address
the investment factor nor other proposals which could partially mitigate the
impact of the rate reduction (see Note 9 to EPP's financial statements and
notes thereto).

 EPP and TGS are presently analyzing various options that could mitigate the
negative impact of the rate reduction.  Accordingly, the final impact of the
ENARGAS resolution on the future revenues and net income of TGS and EPP,
respectively, has not been determined.

PIPELINE OPERATIONS

 Equity in earnings of the pipeline operations represents EPP's 331/3% interest
in CIESA (increased from 25% on July 31, 1996), which owns 70% of TGS, and
EPP's 49% interest in Centragas, which EPP acquired in May 1996 and which began
full commercial operation in February 1996. See "Results of Operations of 
EPP -- General."

  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 VS. THE THREE
MONTHS ENDED JUNE 30, 1996

 Presented below is a summary of income statement information for the combined
pipeline operations of CIESA and Centragas for the second quarter of 1997 and
1996 on a U.S. Generally Accepted Accounting Principles ("GAAP"), historical
U.S. dollar, 100% basis. See "Results of Operations of EPP -- General."





                                       14
<PAGE>   17
<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED
                                                                       JUNE 30,
                                                                       --------
                                                                  1997            1996
                                                               ---------        -------- 
                                                                     (IN THOUSANDS)
 <S>                                                            <C>              <C>
 Gas transportation revenues                                   $  98,855        $104,932
 Gas processing revenues                                          12,557          11,779
                                                               ---------        -------- 
  Total Revenues                                                 111,412         116,711
 Operating, administrative and selling expenses                  (33,405)        (33,562)
 Interest income                                                   1,715           1,793
 Interest expense, net of capitalized interest                   (20,840)        (22,287)
 Other income                                                       (327)           (294)
                                                               ---------        -------- 
  Income Before Minority Interest and Income Taxes                58,555          62,361
 Minority interest                                               (12,785)        (12,551)
 Income tax expense                                              (22,351)        (22,337)
                                                               ---------        -------- 
  Net Income                                                   $  23,419        $ 27,473
                                                               =========        ========
 EPP's Equity in Earnings of Pipeline Operations               $   6,761        $  7,674
                                                               =========        ========
</TABLE>                                               

 GAS TRANSPORTATION REVENUES. Transportation revenues decreased $6.1 million
(6%) for the second quarter of 1997 compared to the second quarter of 1996.
Transportation revenues of Centragas decreased $9.6 million during the second
quarter of 1997 primarily as a result of the reversal of the early completion
bonus recorded in the second quarter of 1996 (see Note 2 to EPP's financial
statements and notes thereto). Transportation revenues at TGS increased $3.5
million during the second quarter of 1997 primarily as a result of the
extension of certain firm transportation agreements and the 1.5% increase in
tariff rates effective July 1, 1996.

 GAS PROCESSING REVENUES. During the second quarter of 1997 as compared to the
second quarter of 1996, processing revenues increased by $0.8 million (7%)
primarily due to increased prices and volumes of natural gas liquids. Improved
operating efficiencies in Argentina during the first quarter of 1997 provided
the increased volume of natural gas liquids. Centragas does not generate any
processing revenues.

 OPERATING, ADMINISTRATIVE AND SELLING EXPENSES. Operating, administrative and
selling expenses remained relatively unchanged from the second quarter of 1996
compared to the second quarter of 1997.

 INTEREST INCOME. Interest income remained relatively unchanged from the second
quarter of 1996 compared to the second quarter of 1997. Interest income at TGS
and CIESA decreased $0.8 million primarily due to lower average short-term
investment balances and lower interest rates during the second quarter of 1997.
Interest income at Centragas increased $0.7 million during the second quarter
of 1997 primarily as a result of loans made to affiliates.

 INTEREST EXPENSE, NET OF CAPITALIZED INTEREST. Interest expense, net of
capitalized interest, decreased $1.4 million (6%) for the second quarter of
1997 compared to the second quarter of 1996 primarily due to decreases at TGS
and CIESA ($1.4 million). The decrease in interest expense, net of capitalized
interest, at TGS and CIESA for the second quarter of 1997 was primarily a
result of lower interest rates at TGS (partially offset by increased average
debt outstanding), lower interest rates at CIESA from debt refinancing (see
"Liquidity and Capital Resources of Pipeline Operations") and increased
capitalized interest at TGS from increased capital expenditures.

 INCOME TAX EXPENSE. The statutory tax rate in Argentina is 33% of taxable net
income, calculated according to Argentine tax regulations which differ in
certain respects from accounting practices followed under Argentine GAAP for
the preparation of financial statements. The statutory tax rate in Colombia is
35% of taxable net income, calculated according to Colombian tax regulations.
The effective tax rate for Centragas differs from the statutory tax rate
primarily due to the taxable effects of inflation and foreign currency exchange
fluctuations under Colombian tax regulations, which are eliminated for U.S.
GAAP reporting. Fluctuations in the value of the Colombian peso will result in
increases or decreases in local income taxes.





                                       15
<PAGE>   18
 Income tax expense remained relatively unchanged from the second quarter of
1996 compared to the second quarter of 1997. Income tax expense at TGS and
CIESA increased $3.8 million during the second quarter of 1997 as a result of
the increase in the Argentina statutory income tax rate from 30% to 33% in
September 1996 and increased taxable income. Income tax expense at Centragas
decreased $3.8 million during the second quarter of 1997 primarily as a result
of the reversal of the early completion bonus (see Note 2 to EPP's financial
statements and notes thereto).

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 VS. THE SIX MONTHS
ENDED JUNE 30, 1996

 Presented below is a summary of income statement information for the combined
pipeline operations of CIESA and Centragas for the first six months of 1997 and
1996 on a U.S. GAAP, historical U.S. dollar, 100% ownership basis. See "Results
of Operations of EPP -- General."

<TABLE>
<CAPTION>
                                                                  SIX MONTHS ENDED
                                                                      JUNE 30,      
                                                             -------------------------
                                                               1997             1996     
                                                             --------         -------- 
                                                                  (IN THOUSANDS)           
                                                           
<S>                                                          <C>              <C>
Gas transportation revenues                                  $204,024         $205,963
Gas processing revenues                                        21,102           22,725
                                                             --------         -------- 
 Total Revenues                                               225,126          228,688
Operating, administrative and selling expenses                (66,082)         (66,337)
Interest income                                                 2,908            3,364
Interest expense, net of capitalized interest                 (41,909)         (42,582)
Other income                                                      228            1,065
                                                             --------         -------- 
 Income Before Minority Interest and Income Taxes             120,271          124,198
Minority interest                                             (25,054)         (25,280)
Income tax expense                                            (47,262)         (41,554)
                                                             --------         -------- 
 Net Income                                                  $ 47,955         $ 57,364
                                                             ========         ========
EPP's Equity in Earnings of Pipeline Operations              $ 14,825         $ 16,529
                                                             ========         ========
</TABLE>

 GAS TRANSPORTATION REVENUES. Transportation revenues decreased $1.9 million
(1%) for the first six months of 1997 compared to the first six months of 1996.
Transportation revenues at Centragas decreased $10.5 million during the first
six months of 1997 primarily as a result of the reversal of the early
completion bonus recorded in the first six months of 1996 (see Note 2 to EPP's
financial statements and notes thereto). Transportation revenues at TGS
increased $8.6 million during the first six months of 1997 primarily as a
result of the extension of certain firm transportation agreements and the 1.5%
increase in tariff rates effective July 1, 1996.

 GAS PROCESSING REVENUES. During the first six months of 1997 as compared to
the first six months of 1996, processing revenues decreased by $1.6 million
(7%) primarily due to scheduled plant maintenance at the Cerri Complex in
Argentina during the first quarter of 1997. This decrease was partially offset
by increased prices and volumes in the second quarter of 1997. Improved
operating efficiencies provided the increased volume of natural gas liquids.

 OPERATING, ADMINISTRATIVE AND SELLING EXPENSES. Operating, administrative and
selling expenses decreased $0.3 million (less than 1%) during the first six
months of 1997 compared to the first six months of 1996. Operating,
administrative and selling expenses decreased $1.5 million at TGS during the
first six months of 1997 primarily as a result of reductions in labor and
operating costs attained through improved operating efficiencies. The reduction
in operating costs was partially offset by increased depreciation expense
related to increased capital expenditures at TGS. Operating, administrative and
selling expenses increased $1.2 million at Centragas during the first six
months of 1997 primarily due to a full period of commercial operations during
1997 with commercial operations commencing on February 24, 1996.





                                       16
<PAGE>   19
 INTEREST INCOME. Interest income decreased $0.5 million (14%) during the first
six months of 1997 compared to the same period in 1996. Interest income at TGS
and CIESA decreased $1.5 million during the first six months of 1997 primarily
due to lower average short-term investment balances and lower interest rates at
TGS and CIESA. This decrease was partially offset by an increase in interest
income at Centragas ($1.0 million), which was primarily attributable to loans
made to affiliates.

 INTEREST EXPENSE, NET OF CAPITALIZED INTEREST. Interest expense, net of
capitalized interest, decreased $0.7 million (2%) for the first six months of
1997 compared to the first six months of 1996. Interest expense, net of
capitalized interest, decreased $1.4 million at TGS and CIESA during the first
six months of 1997 primarily due to lower interest rates and increased
capitalized interest from increased capital expenditures. Interest expense, net
of capitalized interest, increased $0.7 million at Centragas during the first
six months of 1997 primarily as a result of a full period of commercial
operations during 1997 with commercial operations commencing on February 24,
1996.

 INCOME TAX EXPENSE. Income tax expense in the first six months of 1997
increased $5.7 million (14%) compared to the first six months of 1996. Income
tax expense at TGS and CIESA increased $7.5 million during the first six months
of 1997 primarily due to the impact of the increase in the Argentina statutory
income tax rate from 30% to 33% in September 1996 and increased taxable income
in Argentina. Income tax expense at Centragas decreased $1.8 million during the
first six months of 1997 primarily due to the reversal of the early completion
bonus (see Note 2 to EPP's financial statements and notes thereto).

LIQUIDITY AND CAPITAL RESOURCES OF PIPELINE OPERATIONS

 As of June 30, 1997, TGS had access to approximately $300 million under a
global program to issue up to $500 million of debt securities. In addition, TGS
had access to $200 million of debt securities under a shelf registration
statement filed with the Securities and Exchange Commission during 1996.

 In January and February 1997, the board of directors and shareholders of TGS,
respectively, approved the creation of a new global program for the issuance of
short-term debt securities for a maximum amount of $150 million. As of June 30,
1997, TGS had $150 million outstanding at 5.80% under these issuances, which
have been classified as long-term debt since TGS has the ability to and intends
to refinance these securities throughout the five-year term of the new global
program.

 On April 22, 1997, CIESA issued a five year $220 million debt security at the
three month London Interbank Offering Rate ("LIBOR") plus 2% for the first two
years, stepping up to LIBOR plus 2.70% thereafter. CIESA used these proceeds to
retire a $220 million bridge credit facility.

 TGS believes that cash flows from operations supplemented with external debt
financing will provide sufficient liquidity to fund its capital expenditures,
pay dividends, cover its debt service and provide sufficient working capital.

 As of June 30, 1997, CIESA's total capitalization amounted to $1.5 billion.
Total capitalization was comprised of debt of $897 million, shareholders'
equity of $379 million and minority interest of $272 million. Debt as a
percentage of total capitalization increased from 55% at December 31, 1996, to
58% at June 30, 1997.

 Future capital expenditures for Centragas are expected to be minimal.
Centragas expects to meet cash requirements using cash flows from operations.

RECENT EVENTS

 On July 4, 1997, ENARGAS announced its resolution covering the base natural
gas transportation tariffs of TGS for the five-year period commencing January
1, 1998.  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





                                       17
<PAGE>   20
systems expansions.  The resolution did not address the investment factor nor
other proposals which could partially mitigate the impact of the rate reduction
(see Note 9 to EPP's financial statements and notes thereto).

 TGS is presently analyzing various options that could mitigate the negative
impact of the rate reduction.  Accordingly, the final impact of the ENARGAS
resolution on the future revenues and net income of TGS has not been
determined.

POWER OPERATIONS

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 VS. THE THREE
MONTHS ENDED JUNE 30, 1996

 Presented below is a summary of income statement information for the combined
power operations of the Philippine power plants located in Subic Bay ("Subic
Plant") and Batangas ("Batangas Plant") with the Puerto Quetzal Plant in
Guatemala ("Puerto Quetzal Plant") and the Puerto Plata Plant in the Dominican
Republic ("Puerto Plata Plant") for the first quarter of 1997 and 1996 on a
U.S. GAAP, historical U.S. dollar, 100% basis. See "Results of Operations of
EPP -- General."

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                              JUNE 30,
                                                              --------
                                                          1997           1996
                                                        --------       -------- 
                                                          (IN THOUSANDS)
 <S>                                                    <C>            <C>
 Capacity revenues                                      $ 32,840       $ 33,351
 Variable revenues                                        22,909         16,173
                                                        --------       -------- 
        Total Revenues                                    55,749         49,524
 Fuel cost                                               (17,648)       (11,749)
 Operating and administrative expenses                   (11,093)        (9,635)
 Depreciation and amortization expense                    (8,258)        (8,868)
                                                        --------       -------- 
        Net Operating Income                              18,750         19,272
 Interest expense, net                                    (9,188)        (9,494)
 Other expense, net                                         (584)          (403)
                                                        --------       -------- 
        Income Before Income Taxes                         8,978          9,375
 Income tax expense                                       (1,025)          (914)
                                                        --------       -------- 
        Net Income                                      $  7,953       $  8,461
                                                        ========       ========
 EPP's Equity in Earnings of Power Operations           $  4,010       $  4,132
                                                        ========       ========
</TABLE>


 REVENUES. A significant portion of each Project Company's revenue is
attributable to payments tied to the capacity of the respective plant, whether
on annual availability (the Subic and Batangas Plants) or an annual capacity
test (the Puerto Quetzal and Puerto Plata Plants). Capacity revenues remained
relatively unchanged from the second quarter of 1996 to the second quarter of
1997.

 The second type of payment, an energy fee, varies directly with actual output
and, under the current cost structures of the plants, essentially covers
variable costs. Total variable revenues increased $6.7 million (42%) in the
second quarter of 1997 compared to the second quarter of 1996. Variable
revenues increased at the Puerto Plata Plant ($6.2 million) in the second
quarter of 1997 primarily as a result of increased output. Variable revenues
increased at the Puerto Quetzal Plant ($0.5 million) for the second quarter of
1997 primarily due to increased fuel costs. Variable revenues remained
relatively unchanged for the second quarter of 1997 at the Subic and Batangas
Plants.

 FUEL COST. Fuel cost is the expense for the fuel burned at the Puerto Quetzal
and Puerto Plata Plants. An Enron affiliate supplies fuel to these plants at
market-based rates. Total fuel cost increased $5.9 million (50%) for the second
quarter of 1997 compared to the second quarter of 1996. Fuel cost at the Puerto
Plata Plant increased $5.2 million for the second quarter of 1997 primarily due
to the increased output discussed above. Fuel cost at the Puerto Quetzal Plant
increased $0.7 million for the second quarter of 1997 primarily due to the
higher fuel prices discussed





                                       18
<PAGE>   21
above. Fuel is provided to the Subic and Batangas Plants by their customer,
National Power Corporation, at no cost to these plants.

 OPERATING AND ADMINISTRATIVE EXPENSES. Operating and administrative expenses
increased $1.5 million (15%) in the second quarter of 1997 compared to the
second quarter of 1996. The increase was primarily due to increased operating
and administrative expenses of the Puerto Plata Plant ($1.7 million) and the
Batangas Plant ($0.5 million), partially offset by decreased operating and
administrative expenses at the Subic Plant ($0.7 million). The increase in
operating and administrative expenses at the Puerto Plata Plant for the second
quarter of 1997 was primarily due to increased legal fees associated with the
arbitration with Corporacion Dominicana de Electricidad ("CDE"), the government
agency which provides electric services to the Dominican Republic (see Note 9
to EPP's financial statements and the notes thereto) and maintenance costs. The
increase in operating and administrative expenses at the Batangas Plant for the
second quarter of 1997 was primarily the result of increased maintenance costs.
The decrease in operating and administrative expenses for the second quarter of
1997 at the Subic Plant was primarily due to lower maintenance costs.

 DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense
decreased $0.6 million (7%) in the second quarter of 1997 compared to the
second quarter of 1996. The decrease was due primarily to lower depreciation
and amortization expense at the Puerto Plata Plant ($0.5 million).

 INTEREST EXPENSE, NET. Interest expense, net, decreased $0.3 million (3%) in
the second quarter of 1997 compared to the second quarter of 1996. Interest
expense, net, decreased at the Batangas, Subic and Puerto Quetzal Plants for
the second quarter of 1997 ($0.4 million, $0.3 million and $0.1 million,
respectively) primarily due to lower outstanding debt balances. These decreases
were partially offset by the increase in interest expense, net, at the Puerto
Plata Plant ($0.5 million) in the second quarter of 1997, primarily
attributable to increased interest expense on the cost overrun loans (see Note
8 to EPP's financial statements and notes thereto).

 INCOME TAX EXPENSE. Income tax expense is the tax on the power plants in their
respective local jurisdictions. On an aggregate basis, the effective tax rate
for the Subic and Batangas Plants is less than the statutory rate due to the
Subic and Batangas Plants being granted certain income tax holidays and
concessions. PQPC is organized as a U.S. domiciled company with a foreign
branch office. SECLP has been granted an income tax holiday for the life of the
project. Income tax expense increased $0.1 million (12%) for the second quarter
of 1997 compared to the second quarter of 1996 primarily due to an increase at
the Puerto Quetzal Plant primarily attributable to increased taxable income.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 VS. THE SIX MONTHS
ENDED JUNE 30, 1996

 Presented below is a summary of income statement information for the combined
power operations of the Subic, Batangas, Puerto Quetzal and Puerto Plata Plants
for the first six months of 1997 and 1996 on a U.S. GAAP, historical U.S.
dollar, 100% ownership basis. See "Results of Operations of EPP -- General."





                                       19
<PAGE>   22
<TABLE>
<CAPTION>
                                                      SIX MONTHS ENDED
                                                          JUNE 30,
                                                          --------
                                                     1997           1996
                                                   --------       --------
                                                        (IN THOUSANDS)
 <S>                                               <C>            <C>
 Capacity revenues                                 $ 65,556       $ 63,325
 Variable revenues                                   45,407         37,524
                                                   --------       --------
        Total Revenues                              110,963        100,849
 Fuel cost                                          (34,829)       (27,637)
 Operating and administrative expenses              (20,390)       (18,193)
 Depreciation and amortization expense              (16,963)       (17,741)
                                                   --------       --------
        Net Operating Income                         38,781         37,278
 Interest expense, net                              (18,298)       (18,241)
 Other expense, net                                  (1,246)        (1,148)
                                                   --------       --------
        Income Before Income Taxes                   19,237         17,889
 Income tax expense                                  (2,489)        (2,180)
                                                   --------       --------
        Net Income                                 $ 16,748         15,709
                                                   ========       ========
 EPP's Equity in Earnings of Power Operations      $  8,427       $  7,657
                                                   ========       ========
</TABLE>

 REVENUES. Capacity revenues increased $2.2 million (4%) in the first six
months of 1997 compared to the first six months of 1996. Capacity revenues
increased at the Puerto Plata Plant ($1.0 million) in the first six months of
1997 primarily due to a full period of commercial operations during 1997 with
commercial operations commencing on January 15, 1996. Capacity revenues
increased $0.5 million and $0.3 million at the Subic and Batangas Plants,
respectively, in the first six months of 1997 primarily due to more efficient
operations. Capacity revenues increased $0.4 million at the Puerto Quetzal
Plant in the first six months of 1997 primarily due to the annual price
increase per the contract with the customer effective each February.

 Total variable revenues increased $7.9 million (21%) for the first six months
of 1997 compared to the first six months of 1996 primarily due to the increase
at the Puerto Plata Plant ($8.1 million), partially offset by the decrease at
the Puerto Quetzal Plant ($0.5 million). The increase at the Puerto Plata Plant
in the first six months of 1997 was primarily a result of increased output. The
decrease at the Puerto Quetzal Plant in the first six months of 1997 was
primarily attributable to lower fuel prices. Variable revenues remained
relatively unchanged for the first six months of 1997 at the Subic and Batangas
Plants.

 FUEL COST. Total fuel cost increased $7.2 million (26%) for the first six
months of 1997 compared to the first six months of 1996 primarily as a result
of the increase in fuel cost at the Puerto Plata Plant. Fuel cost at the Puerto
Plata Plant increased $7.0 million for the first six months of 1997 primarily
due to the increased output discussed above.

 OPERATING AND ADMINISTRATIVE EXPENSES. Operating and administrative expenses
increased $2.2 million (12%) in the first six months of 1997 compared to the
first six months of 1996. The increase was primarily due to increased operating
and administrative expenses of the Puerto Plata Plant ($3.4 million) and the
Batangas Plant ($0.3 million), partially offset by decreased operating and
administrative expenses at the Subic Plant ($0.9 million) and the Puerto
Quetzal Plant ($0.6 million). The increase in operating and administrative
expenses at the Puerto Plata Plant for the first six months of 1997 was
primarily due to increased legal fees associated with the CDE arbitration (see
Note 9 to EPP's financial statements and the notes thereto) and maintenance
costs. The increase in operating and administrative expenses at the Batangas
Plant for the first six months of 1997 was primarily attributable to increased
insurance and maintenance costs. The decrease in operating and administrative
expenses at the Subic and Puerto Quetzal Plants for the first six months of
1997 were primarily a result of decreased maintenance costs.

 DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense
decreased $0.8 million (4%) in the first six months of 1997 compared to the
first six months of 1996. The decrease was primarily due to lower depreciation
and amortization expense at the Puerto Plata Plant ($0.8 million).





                                       20
<PAGE>   23
 INTEREST EXPENSE, NET. Interest expense, net, remained relatively unchanged
from the first six months of 1996 compared to the first six months of 1997.
Interest expense, net, decreased $0.6 million, $0.4 million and $0.2 million at
the Batangas, Subic and Puerto Quetzal Plants, respectively, in the first six
months of 1997 primarily due to lower outstanding debt balances. Interest
expense, net, increased $1.3 million at the Puerto Plata Plant in the first six
months of 1997 primarily as a result of increased interest expense on the cost
overrun loans (see Note 8 to EPP's financial statements and notes thereto).

 INCOME TAX EXPENSE. Income tax expense increased $0.3 million (14%) for the
first six months of 1997 compared to the first six months of 1996 primarily as
a result of an increase at the Puerto Quetzal Plant primarily attributable to
increased taxable income.

LIQUIDITY AND CAPITAL RESOURCES OF POWER OPERATIONS

 Capital expenditures for the power plant operations are expected to be
insignificant in 1997. The power plant operations expect to meet short and
long-term liquidity needs using cash flows from operations. If a specific power
plant has short-term liquidity needs that cannot be met with cash flows from
operations, it is expected that such plant would borrow or be advanced the
necessary funds from an affiliated company.

INFORMATION REGARDING FORWARD LOOKING STATEMENTS

 This Quarterly Report on Form 10-Q includes forward looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Although EPP
believes that its expectations are based on reasonable assumptions, it can give
no assurance that its goals will be achieved. Important factors that could
cause actual results to differ materially from those in the forward looking
statements herein include political developments in foreign countries, the
timing and success of Enron's efforts to develop international power, pipeline
and other infrastructure projects and conditions of the capital markets and
equity markets during the periods covered by the forward looking statements.





                                       21
<PAGE>   24
                     ENRON GLOBAL POWER & PIPELINES L.L.C.

                                    PART II.
                               OTHER INFORMATION

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       None.

ITEM 5.       OTHER MATTERS

       On May 16, 1997, EPP announced that Enron had identified a proposed 116-
megawatt, natural gas-fired combined heat and power plant in Nowa Sarzyna,
Poland, as a designated development project for EPP's project portfolio. Under
the Purchase Right Agreement between EPP and Enron, designated development
projects must be offered by Enron to EPP at prices which meet certain projected
minimum earnings, cash flow and internal rate of return criteria. With the
addition of this Poland project as a designated development project, four Enron
projects (Dabhol, India; Hainan Island, China; Nowa Sarzyna, Poland; and
Trakya, Turkey) are now designated development projects which Enron will offer
to EPP on terms specified in the Purchase Right Agreement.


ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

  (a)  Exhibits:

       10.1   Firm Transportation Service Agreement FT-37, between TGS and Gas
              Natural BAN S.A. commencing May 22, 1996, with English
              translation.

       10.2   Firm Transportation Service Agreement FT-38, between TGS and
              MetroGas S.A. commencing July 25, 1996, with English translation.

       10.3   Firm Transportation Service Agreement FT-40, between TGS and
              Camuzzi Gas Pampeana S.A. commencing June 28, 1996, with English
              translation.

       10.4   US$220,000,000 Note Purchase Agreement dated as of April 18,
              1997, among CIESA, Banco Supervielle Societe Generale S.A.,
              Goldman, Sachs & Co. and Societe Generale as Arrangers, the
              Managing Agents named therein, the CoAgents named therein, the
              Lead Managers named therein, the Administrative Agent named
              therein and the Purchasers named therein.

       27     Financial Data Schedule

  (b)  Reports on Form 8-K:

       None.





                                       22
<PAGE>   25
                                   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.
                                    (Registrant)
                              
Date:         August 5, 1997        By /s/ RODNEY L. GRAY
                                       ------------------
                                       Rodney L. Gray
                                       Chairman and Chief Executive Officer
                              
Date:         August 5, 1997        By /s/ KURT S. HUNEKE
                                       ------------------
                                       Kurt S. Huneke
                                       President and Chief Financial Officer





                                       23
<PAGE>   26
                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER 
-------
<S>    <C>
10.1   Firm Transportation Service Agreement FT-37, between TGS and Gas Natural
       BAN S.A. commencing May 22, 1996, with English translation.

10.2   Firm Transportation Service Agreement FT-38, between TGS and MetroGas
       S.A. commencing July 25, 1996, with English translation.

10.3   Firm Transportation Service Agreement FT-40, between TGS and Camuzzi Gas
       Pampeana S.A. commencing June 28, 1996, with English translation.

10.4   US$220,000,000 Note Purchase Agreement dated as of April 18, 1997, among
       CIESA, Banco Supervielle Societe Generale S.A., Goldman, Sachs & Co. and
       Societe Generale as Arrangers, the Managing Agents named therein, the
       CoAgents named therein, the Lead Managers named therein, the
       Administrative Agent named therein and the Purchasers named therein.

27     Financial Data Schedule
</TABLE>





                                       24