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