---------------------- Forwarded by Chris Germany/HOU/ECT on 01/09/2001 07:19 
AM ---------------------------


John Hodge@ENRON
01/08/2001 05:21 PM
To: Frank W Vickers/NA/Enron@Enron, Scott Neal/HOU/ECT@ECT, Julie A 
Gomez/HOU/ECT@ECT, Colleen Sullivan/HOU/ECT@ECT, Brad McKay/HOU/ECT@ECT, Dick 
Jenkins/HOU/ECT@ECT, Robin Barbe/HOU/ECT@ECT, Dan Junek/HOU/ECT@ECT, Chris 
Germany/HOU/ECT@ECT, Scott Goodell/Corp/Enron@ENRON, Sean 
Boyle/Corp/Enron@ENRON
cc:  
Subject: Tennessee's CanEast Project and Transco's MarketLink Expansion

Tennessee is finalizing their CanEast project which will scoop the 
Independence Pipeline effort and allow Tennessee to deliver 280,000 Dthd into 
Leidy beginning in 11/1/01 at the same time the first phase of Transco's 
MarketLink begins.  The first phase of MarketLink has a capacity of 166,000 
Dthd and the second phase is scheduled to begin 11/1/02 with an additional 
130,000 Dthd.  Tennessee was the successful bidder on a recent open season 
that National Fuel had for 19,100 Dthd of space between Niagara and Leidy.  
Tennessee has executed a 10 year lease for the space.  They will use this 
capacity and a 10 year lease arrangement that they are finalizing with 
Dominion Transmission for Ellisburg to Leidy capacity to form the basis of 
their CanEast Project.  The Dominion lease will allow Tennessee to use 
unsubscribed Zone L to Zone 4 capacity and deliver approximately 260,000 Dthd 
from the Gulf Coast to Leidy.  (Dynegy negotiated an index-based, revenue 
sharing contract with Tennessee for delivery into Dominion using this 
capacity for the 11/1/00 - 10/31/01 period).  Tennessee is currently 
negotiating with shippers to subscribe to the CanEast capacity.  They are 
willing to negotiate contracts less than ten years and have negotiated terms 
that synch up with the second phase of MarketLink.  This should allow 
available capacity from the Gulf Coast or Niagara to Leidy or secondary 
delivery points such as Dominion (since Phase I of MarketLink is set) for one 
year contracts.

As a reminder, firm shippers with binding contracts on MarketLink are:


Phase I (11/1/01 start)   Volume  Delivery Point  Comment

Aquila Energy Marketing    25,000 Dthd Manhattan(Con Ed) Option to change to
          11/1/02 start date
Consolidated Edison     30,000  Manhattan(Con Ed)
ConEdison Energy     10,000  Manhattan(Con Ed)
St. Lawrence Cement       1,000  Camden
Williams Energy Marketing  100,000  Manhattan(Con Ed)

Total Phase I    166,000 Dthd

Phase II (11/1/02)

Virginia Power Energy Marketing 100,000 Dthd Trenton-Woodbury Non-New York
PPL Energy Plus     30,000  Princeton Junction Non-New York

Total Phase II    130,000 Dthd

Transco has until the end of April 2001 to file additional binding executed 
contracts with the FERC for an additional 404,000 Dthd of Leidy to New York 
capacity or the MarketLink Expansion as approved by FERC will be limited to 
the 296,000 Dthd of the first two phases.