Re: isda

Larry Gagliardi has been talking to Valero Marketing and Supply Company about
doing some gas crack business, and it appears Valero will not trade with us
under the current form of Master Swap Agreement we have in place with them.
They will only trade under their form of ISDA Master, a copy of which is
attached below. I spoke to their lawyer, Kim Bowers, who is very nice, and
she asked us to make our comments to their form by email. After talking to
Tanya while you were out, it appears that we need to revisit their credit
situation since the credit under our existing master swap is quite old. We
will try to work on reviewing the legal terms while we wait to get the credit.
----- Forwarded by Tana Jones/HOU/ECT on 05/18/2000 02:49 PM -----

Larry Gagliardi@ENRON
05/11/2000 02:36 PM

To: Tana Jones/HOU/ECT@ECT
cc:
Subject: Re: isda

Tana, can you let me know if you can take care of this request from Valero?
Thank you 3-0543
---------------------- Forwarded by Larry Gagliardi/Corp/Enron on 05/11/2000
02:28 PM ---------------------------
Dale Neuner @ ECT 05/11/2000 08:59 AM

To: Larry.gagliardi@enron.com
cc:

Subject: Re: isda

Larry -

Please forward your request to Tana Jones, a paralegal who will certainly get
this to the right place. Tana can be reached at 3-3399.

Dale

---------------------- Forwarded by Dale Neuner/HOU/ECT on 05/11/2000 08:55
AM ---------------------------

Larry Gagliardi@ENRON
05/11/2000 08:20 AM
To: Dale Neuner/HOU/ECT@ECT
cc:
Subject: Re: isda

Dale, Pat Markey referred me to you. Valero sent me this request, can you
process it or tell me who can?
---------------------- Forwarded by Larry Gagliardi/Corp/Enron on 05/11/2000
08:10 AM ---------------------------

wilsonj@valero.com on 05/10/2000 09:40:12 AM
To: larry.gagliardi@enron.com
cc: bowersk@valero.com, bhaecker@valero.com

Subject: Re: isda

Thanks for your call this morning. I was in the middle of legging some gas
cracks and had to go.

Before we begin trading with you, we need to execute an ISDA. I am
attaching a copy of our standard schedule. We have this agreement in place
with all of the major dealers; and so, in general, we will not accept
substantial changes to the agreement, particularly with regard to credit
terms.

Again, thanks for your call, and I look forward to dealing with you in the
future.

John
----- Forwarded by John Wilson/PEUSA on 05/10/2000 09:37 AM -----

(See attached file: Schedule 5500.doc)

- Schedule 5500.doc