Agreement to Upgrade and Operate Natural Gas Pipeline Facilities

Let's talk.

---------------------- Forwarded by Gerald Nemec/HOU/ECT on 01/17/2000 03:57
PM ---------------------------

David Juist <DRJ@topsoe.com< on 01/12/2000 05:18:35 PM
To: Gerald Nemec/HOU/ECT@ECT
cc: Linda Payne <LJP@topsoe.com<, Niels Udengaard <NRU@topsoe.com<
Subject: Agreement to Upgrade and Operate Natural Gas Pipeline Facilities

Dear Gerald:

In accordance with our conversation of yesterday regarding the Agreement
to Upgrade and Operate Natural Gas Pipeline Facilities (the "Upgrade
Agreement") I have reviewed the documents and investigated the location
of the metering station; the results are as follows:

* The existing sales contract provides quality and pressure
obligations.
* The existing sales contract provides for measurement of the gas.
* The existing sales contract provides for noncompliance with
quality obligations.
* As you indicated, the existing sales contract provides you have
no obligation to odorize the gas.
* The existing sales contract provides for the installation of
meters by Enron. Part of the metering equipment was replaced under the
existing sales contract pursuant to an amendment (I will be pleased to
provide you a copy if you wish).
* The existing sales contract states that HTI is responsible for
all taxes except specifically excluded taxes; taxes measured by net
income are in the list of excluded taxes.
* The HPL Facilities are on property owned by HTI. Accordingly,
company policy dictates that any subcontractor coming on HTI premises
must carry certain types of insurance that provides for certain
endorsements. A sample provision is attached to this message.

On the basis of the meeting held in our offices on Monday with
representatives of your company, Niels Udengaard, our Vice President,
was under the impression that the Upgrade Agreement was no longer
required. We are prepared to handle the matter in the manner formerly
used to replace metering equipment.

Please let me have your comments.

Sincerely,
Haldor Topsoe, Inc.
David R. Juist
Legal Counsel
Telephone: 281-228-5025
Facsimile: 281-228-5019

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