Pioneer Line

Gerald,

Here is the Conoco option deal....

There is an 8-inch products line that runs from the Sinclair Refinery near
Rawlins, Wyoming to their terminal in Salt Lake City, Utah. The line is
owned by Pioneer Pipeline Company which is jointly owned by Conoco (85%) and
Sinclair (15%). Pioneer is in the process of expanding part of this system
by building a 12 inch loop between Rawlins and the Wasatch Front in Utah.
Through this expansion project, Pioneer will be left with an abandoned 8 inch
line along the path of the loop.

Conoco has agreed to allow Enron the opportunity to convert the line to gas
service if there is sufficient economics to justify it. If it makes sense to
convert to gas, the deal would likely be that Enron funds the conversion
costs and has 100% of the capacity at a defined rate with Pioneer retaining
ownership of the pipeline.

We need to draft an agreement with Conoco which protects our exclusive rights
for gas service. The major elements would be

1. Exclusive term for Enron to pursue gas transmission opportunities along
the Pioneer line. 18 months after date of abandonment.

2. Min term under which Conoco would provide gas transportation service. 10
year term

3. Obligation to negotiate with Enron for gas tranportation service if
sufficient demand/thoughput is identified.

We'll discuss it while in town tomorrow hopefully.