Kern River Bid Letter

Attached for your review is a draft letter for third parties whom with we
plan to participate in the Kern River Open Season. Barry asked that I
forward to you as well for review.
----- Forwarded by Gerald Nemec/HOU/ECT on 03/14/2001 09:31 AM -----

Gerald Nemec
03/13/2001 07:00 PM

To: Mark Whitt/NA/Enron@Enron, Paul T Lucci/NA/Enron@Enron, Tyrell
Harrison/NA/Enron@Enron
cc: Barry Tycholiz/NA/Enron@ENRON, Julie A Gomez/HOU/ECT@ECT
Subject: Kern River Bid Letter

Mark, Attached is the letter agreement we discussed. Please review. It is
rough.

Some issues to note:

1. The Kern PA cannot be assigned without their consent, which shall not be
unreasonably withheld. If Kern didn't like the fact that we are receiving
assignment from 3 or 4 other shippers, they might withhold consent if they
thought we were superceding their bid procedures. Not sure if they would,
but it is a risk.

2. If the assignment is done after the producer executes the firm transport
agreement, Kern could require to capacity to be released via capacity release
at max rate.

3. I took a stab at the mark-to-market calculation. Probably needs more
substance though.

Lets discuss.