LOU - August 4th

Eva,

I have reviewed the latest draft of the LOU and the document reflects all the
changes with one major exception, the purchase price not reflecting a value
of $204 million. On Friday morning, I spoke with Mark Whitt and thought we
had come to agreement on a basket of negotiated items, the Purchase Price,
Specified Geographical Area, and Buyer's Rights. It was my position that
these items were all tied together. In the subsequent meeting in the
afternoon, you and I participated in a meeting with ENA concerning final
comments on the LOU. Their earlier meeting with Dave DeLainey was discussed
and nothing was mentioned concerning the purchase price when discussing
changes to the LOU. Northern Border did bring up the discussion on an
exclusivity clause. A change in purchase price was not discussed by ENA.

In addition, on Friday afternoon John Jesse and I had a conference call with
Ranabir Dutt and Brian Bierbach concerning the note term sheet. It was
agreed that Northern Border would pursue a note with its bank syndicate and
rely on ENA in a fallback situation, if John through discussions with bankers
next week gets comfortable with that approach.

I am surprised at $205 million purchase price in ENA's latest LOU and will
talk to Mark about the purchase price on Monday morning before the meeting
with Gulfstar. If ENA does not agree with the $204,000,000.00 purchase
price, Northern Border will have to make adjustments in the Buyer's Rights
section. Clauses (i) and (ii) will need to be deleted, as this was agreed to
by Northern Border at a $204 million purchase price. In addition, this
might affect Northern Borders comfort level in relying on ENA in a fallback
position for a note, as Jerry Peters had expressed some concerns to John and
I regarding this approach.

I will try to call you before 11:00 a.m. on Monday to give you an update on
this matter.

Paul