Re: Texas General Land Office IT Transport

FYI. Wanted to forward what I'm getting from legal on the TGLO contract-
clear as mud.
---------------------- Forwarded by Lauri A Allen/HOU/ECT on 12/20/2000 06:55
AM ---------------------------
From: Gerald Nemec on 12/19/2000 06:17 PM
To: Lauri A Allen/HOU/ECT@ECT, Dan J Hyvl/HOU/ECT@ECT
cc:
Subject: Re: Texas General Land Office IT Transport

Lauri, From a legal standpoint, we can cut the nomination on an
interruptible agreement at our discretion. The contract clearly gives us
this right. I haven't specifically reviewed the contract, but I am assuming
it is our standard form. I will check this.

Yes, I would consider HISD facilities to be state facilities. The fact that
this goes to Entex first complicates the issue.

Dan, was the intent that it be directly delivered to state facilities, or if
it ultimately ended up at state facilities?

Lauri A Allen
12/19/2000 10:57 AM

To: Dan J Hyvl/HOU/ECT@ECT, Gerald Nemec/HOU/ECT@ECT
cc:
Subject: Texas General Land Office IT Transport

I haven't heard anything back from you guys on this. Any insight? I know
Linda Roberts is also working a deal with TGLO to convert bbls to mmbtus
which could mean incremental volumes that TGLO would be trying to get into
Midcon.
---------------------- Forwarded by Lauri A Allen/HOU/ECT on 12/19/2000 09:37
AM ---------------------------
From: Gerald Nemec on 12/05/2000 04:12 PM
To: Dan J Hyvl/HOU/ECT@ECT
cc: Lauri A Allen/HOU/ECT@ECT
Subject: Texas General Land Office IT Transport

Dan, Any input you have on this contract would be appreciated.

----- Forwarded by Gerald Nemec/HOU/ECT on 12/05/2000 04:11 PM -----

Lauri A Allen
12/05/2000 02:53 PM

To: Gerald Nemec/HOU/ECT@ECT, Eric Gillaspie/HOU/ECT@ECT
cc: Daren J Farmer/HOU/ECT@ECT, Edward.D.Gottlob@enron.com
Subject: Texas General Land Office IT Transport

Gerald/Eric-

I have a couple of questions regarding TGLO transport contract
012-88494-202. We are currently delivering a volume of 28.000mm into various
Midcon interconnects on this contract that are designated to go to
Reliant/Entex for the purpose of heating HISD schools. The transport
contract stipulates different rates for this delivery depending on whether
the gas is intended for state facilities or not. My first question, then,
is: are HISD schools considered state facilities? And, if HISD schools are
considered state facilities, does the fact that this gas is being delivered
to them via Reliant/Entex utilizing Midcon's pipe make any difference?

I am asking these questions not only to assure that we are recouping the
correct transport rate, but also to determine what the consequences might be
if I interrupt this delivery. We are having difficulty getting enough gas
into Midcon to cover our Entex noms and I am just exploring my options. I
would also expect that this volume should decrease when HISD closes for the
Christmas holidays- does the fact that this is an IT agreement give me enough
leverage to cut this nom if TGLO does not do so voluntarily?

Thanks for your help.