RE: CAN Gas Straddle Option

Please include changes below.

-----Original Message-----
From: Walker, Chris
Sent: Wednesday, March 28, 2001 3:03 PM
To: Taylor, Mark
Cc: Puthigai, Savita
Subject: CAN Gas Straddle Option

Mark,

The Calgary office would like to offer a straddle option on EOL. Greg
Johnston has created a draft of the language which I am attaching. I'll call
to schedule a time to go over this.

CW
3-7533

CAN NG FinStdle Opt AECO ES5 May01 CAD/GJ

A financial Option Transaction with Enron Canada Corp., under which the
Seller receives the Premium and the Buyer receives the Cash Settlement
Amount. Each calendar month during the Term of the Transaction will be a
Determination Period, provided that if the Term of the Transaction is less
than one calendar month the Determination Period shall be the Term of the
Transaction. The Notional Quantity per Determination Period shall be
calculated from the volume submitted by Counterparty on the Website in
accordance with the unit of measure. The Premium shall equal the product of
(i) the price submitted by Counterparty via the Website, multiplied by (ii)
the Notional Quantity per Determination Period, multiplied by (iii) the
number of Determination Periods during the Term of the Transaction. The
Payment Date for the Premium shall be 2 business days after the Trade Date of
the Transaction. The Payment Date(s) for the Cash Settlement Amount shall be
5 business days after the Cash Settlement Amount is determinable. The Cash
Settlement Amount for each Determination Period shall be the product of (a)
the Notional Quantity per Determination Period, multiplied by (b) the
absolute difference between the Strike Price and the Index. The Option style
and type is a European Straddle Option. Automatic Exercise is Applicable.
The Strike Price for the Transaction shall be as set forth on the Website.
The Term of the Transaction shall correspond to the date(s) set forth on the
Website.
The Index for each Determination Period shall be the AECO Monthly Index,
where: AECO Monthly Index means the price in the Avg column published in the
table Canadian Natural Gas Supply Prices, in the Canadian Gas Price Reporter,
in the row for Alberta: AECO C & NIT One-Month Spot for the month in which
the applicable Determination Period occurs.
The Option Style and type shall be a European Straddle.
The price is quoted in Canadian Dollars per unit of volume, which will be the
Contractual Currency.
The unit of measure against which the price is quoted shall be gigajoules and
the quantity shown shall be in GJs per day.