Warranty

Venona,

I have discussed the warranty issue with my attorney and he suggested the
following be used as Section 8.5. The language in this section allows for
gas from outside the state. Please advise.

The following representations and warranties shall apply to Transactions
under the stated conditions: (i) if Company is Buyer, Seller represents and
warrants to Buyer that all Gas will have been produced (a) within the state
of Texas and will not have been commingled with other Gas which is or may be
sold, consumed, transported or otherwise utilized in interstate commerce in
such manner which would subject an intrastate Transporter to the jurisdiction
of the Federal Energy Regulatory Commission or any successor authority under
the Natural Gas Act of 1938 or (b) outside of the state of Texas with any
transportation on an interstate pipeline having been conducted under Section
311 (a)(1) of the Natural Gas Policy Act and (ii) if Company is Seller and
the Delivery Point(s) for the Transaction are not interstate
interconnections, Buyer represents and warrants to Seller that none of the
Gas will be sold, consumed, transported or otherwise utilized outside the
state or sold to another party which will subsequently sell, consume,
transport or otherwise use the Gas outside the State where such event would
subject an intrastate Transporter to the jurisdiction of the Federal Energy
Regulatory Commission or any successor authority under the Natural Gas Act of
1938.

Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax 713-646-3490