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Frank and Steve, see the attached. My theory, which is based on our
experience with the Gallup compressor, is that we could enter into a joint ownership and operating agreement with Agave, and as long as we convince the Commission that the agreements give TW sufficient control over the operation of the facility to ensure FERC regs are complied with, they will be OK with the joint ownership -- and not try to assert jurisdiction over Agave (a gathering company). Although it seems likely that other pipelines have entered into such arrangements, I've not found any cases on point here. Do you agree with my conclusion? Any other ideas or insights? Please let me know. Thanks. ---------------------- Forwarded by Susan Scott/ET&S/Enron on 04/20/2000 03:46 PM --------------------------- Kevin Hyatt 04/12/2000 05:26 PM To: Susan Scott/ET&S/Enron@ENRON cc: sharris1@enron.com Subject: Storage project deal structure Susan I need some regulatory help in determining some possible deal structures. We are working with Agave to develop a storage facility near the West Tx lateral in Eddy County, NM. My original thought was both parties would share in the development costs and own equity interests in the facility. TW would then lease out storage space to shippers plus use storage capacity to augment our Park N Ride capability. The storage would be connected via lateral to our W Tx line. But then it occurred to me how do we share ownership between regulated and non-regulated entities? Do you have some time Friday morning to talk about this? thanks Kevin x35559
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