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Enron Mail |
John, I have a flight this afternoon to San Antonio. I will take this note
with me and review. I will call you either late this evening or tommorrow morning to discuss. John Hodge@ENRON 01/12/2000 10:14 AM To: Gerald Nemec/HOU/ECT@ECT cc: Stephanie Miller/ET&S/Enron@ENRON, Julie A Gomez/HOU/ECT@ECT Subject: Millennium Pipeline Precedent Agreement As part of Enron's acquisition of the wholesale unit of Columbia Energy Services, Enron North America has a Precedent Agreement with the Millennium Pipeline project. The Precedent Agreement contains termination clauses that are date certain for January 14, 2000. These clauses have been extended numerous times in the past. The PA also contains a clause that gives Enron the right to terminate the agreement if FERC's Order regarding Millennium's Certificate Application is not satisfactory and acceptable to Enron. The FERC has not acted upon Millennium's Certificate Application. The PA also includes an "exclusivity" clause (Section 3.4) that we would like clarified in conjunction with extending the dates in the agreement. Millennium would like to clarify the "exclusivity" clause in an interpretive letter, rather than eliminate the language from the PA. Millennium claims that if they eliminate the language for Enron, they would have to do the same for other shippers. Therefore, we would like to remove the ambiguity of the "exclusivity" clause and clarify Enron's rights through the interpretive letter. If we cannot agree on the interpretive letter language, then we can still exercise the right to terminate the PA by deeming the FERC Order unacceptable. The following is the language of the "exclusivity" clause, a rough cut that I have made for language in the interpretive letter and the clause pertaining to the FERC Order. Could you please give me your thoughts on the interpretive letter. We can then send the letter to the pipeline for signature by both Enron North America and Millennium. Exclusivity Clause Section 3.4 This Agreement shall constitute the exclusive agreement by which Shipper shall seek to obtain a firm natural gas transportation service with respect to Shipper's MDQ, except for agreements pursuant to which Shipper contracts for the transportation of its MDQ to and from the Millennium Project. Interpretive Letter Notwithstanding anything contained in Section 3.4 of the Millennium Pipeline Project Precedent Agreement between the sponsors of the Millennium Pipeline Project and Enron North America ("Shipper"), as successor to Columbia Energy Services, Shipper is not precluded from obtaining firm or interruptible natural gas transportation services on any interstate pipeline offering services similar to the Millennium Pipeline. FERC Order Clause Section 5.1 If the FERC's order regarding Millennium's Certificate Application is not satisfactory and acceptable to Shipper in its sole discretion, then Shipper may terminate this Agreement by giving Millennium notice thereof within fifteen (15) days after the date of issuance of the FERC's order. In the event that Millennium fails to receive approval of this Agreement from its Management Committee, to the extent required, Millennium may terminate this Agreement by giving Shipper fifteen (15) days prior notice.
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