TUFCO Trawick I/C

Steve, We are currently negotiating an interconnect agreement for an upgrade
of an existing interconnect off the Trawick System into TUFCO. The
interconnect is solely a delivery to TUFCO. We are down to one point of
difference in the agreement.

Typically HPL disclaims any liability for consequential damages to the other
party. TUFCO is asking for an exception for any violation of gas quality
specifications. This would mean that if HPL delivered off spec gas to TUFCO
which required cleanup of their pipeline system or caused damage to a
customer of TUFCO's HPL would be liable under this Agreement.

From a legal standpoint, we can make this exception, but I wanted to make
sure everyone understood and agreed with the acceptance of this potential
liability. Assuming we are properly monitoring all our receipts there
shouldn't be an issue.

Please let me know what you think about this situation. I can forward a copy
of the interconnect agreement if you do not currently have one.