New and Exciting National Fuel Deal

---------------------- Forwarded by Chris Germany/HOU/ECT on 06/23/2000 03:06
PM ---------------------------

Chris Germany
06/23/2000 02:35 PM
To: Beverly Beaty/HOU/ECT@ECT, Victor Lamadrid/HOU/ECT@ECT, Victoria
Versen/HOU/ECT@ECT, Molly Johnson/HOU/ECT@ECT, Alvin
Thompson/Corp/Enron@Enron, Angie Zeman/Corp/Enron@ENRON, Cindy
Vachuska/HOU/ECT@ECT, Clarissa Garcia/HOU/ECT@ECT,
pvillag@columbiaenergy.com, Scott Goodell/Corp/Enron@ENRON, Judy
Townsend/HOU/ECT@ECT, Dan Junek/HOU/ECT@ECT, Dick Jenkins/HOU/ECT@ECT, Robin
Barbe/HOU/ECT@ECT, Maureen Smith/HOU/ECT@ECT, Scott Hendrickson/HOU/ECT@ECT,
Sarah Mulholland/HOU/ECT@ECT, Brenda H Fletcher/HOU/ECT@ECT, Alicia
Perkins/HOU/ECT@ECT, Crystal Hyde/HOU/ECT@ECT, David Oliver/HOU/ECT@ECT,
Scott Neal/HOU/ECT@ECT
cc:
Subject: New and Exciting National Fuel Deal

We have a new Park & Loan / Storage deal on National Fuel effective
6/23/2000. National Fuel transferred 1,000,000 dth from our parking contract
to our brand new firm storage contract. We are now long FSS and short PALS.

FSS
We have the rights to withdraw on a firm basis up to 33,333 dth per day.
However, we need to call and get permission to withdraw more than 33,333 dth
on any given day. Also, the withdrawal takes place at an interconnect, like
Trco-Leidy. We do not have to ship the gas on Nat Fuel.

IAS
We give Nat Fuel the gas back on an IT basis via our IAS agreement (Nat Fuel
is still setting up the contracts). We can give Nat Fuel the gas back at any
point we wish. We do not have to pay back the gas at the same point we
withdraw on the FSS. And we can pay back the gas before we withdraw it.

COST
What we will probably do most of the time is take the FSS into Trco at Leidy
and payback the IAS agreement at Niagara and Leidy. ENA will pay Nat Fuel
1,000,000 dth x ($.125 / 3 months) or $41,666.67 per month for June, July,
and August. This deal is over on Aug 31st. I just entered the demand charge
on my Market East demand charge sheet. I do not have any deals set up in
Sitara. I need to see the contracts from Nat Fuel first. I will keep track
of the balances on an Excel worksheet. All commodity cost and fuel is
capured in the $.125 demand charge. Beavy and I will make sure the payback
and withdrawal tickets are balanced in Sitara once we start flowing gas on
this deal. If we payback 60,000 dth next week and we do not have any
withdrawals, then I will show a 60,000 dth withdrawal on 8/31/2000 just to
keep the tickets balanced.

Payback Techniques
Under the expert eye of the wonderfull, superfantastic, all-around great guy,
Dick Jenkins, I've come up with some options on paying back the gas.

Niagara - only works when Niagara is open. Nat Fuel has been very close to
capacity this week. However, we should always see what Martin can do with
the gas if it gets backed up into TCPL. OR if Niagara is constrained, we can
ship the gas on our firm Nat Fuel contract then pay it back to Nat Fuel, at
today's prices that cost about $.105

Wadd - take our Tenn Z6 length into CNG via Iroq, ship it to Trco- Leidy, and
payback the gas at Leidy. At today's prices, that cost about $.055,
assuming we get to roll over all of our CNG fuel waivers.

Tenn - we just need to see what type of IT rate Dan can get to ship the
Gulf to Tenn Z4 (Ellisburgh). We can also move the Dracutt to Nat Fuel on
segmented capacity for $.145 or move Wright to Nat Fuel for $.11. We cannot
use the Net 284 contract on any of the Tenn / Nat Fuel interconnects.

Let me know if you have any questons.