----- Forwarded by Mary Cilia/NA/Enron on 10/04/2000 08:38 AM -----

	"David Gohlke" <DGOHLKE@skadden.com>
	10/03/2000 08:12 PM
		 
		 To: Mary.Cilia@enron.com
		 cc: glauco.palhoto@enron.com
		 Subject: Re: Preliminary Engineering Release Agmt. - final issue


Mary,

I've attached the latest draft, which has not yet been sent to the other 
side, and which includes a provision not yet agreed by ESA or negotiated with 
EECC (Clause 1(c)).  The schedule 1, which you care about, should reflect the 
changes you and I discussed with Jeff last week.  SInce this draft is not an 
agreed one, will you delete it after you review it, and if you are not ok 
with all the changes, let me know so I can include them when we finalize this 
tomorrow (Wed).  I will include you on the final negotiated draft tomorrow 
when I (or Glauco) send it out for final approval.

Dave

>>> <Mary.Cilia@enron.com> 10/03/00 03:53PM >>>

Dave -

Do we have the latest draft with the changes I submitted for Appendix 1?
Can you please send it to me.  Thanks.

Mary



                    "David
                    Gohlke"              To:     john.g.rigby@enron.com,
                    <DGOHLKE@skad        john.guidry@enron.com,
                    den.com>             john.r.ayres@enron.com, 
mary.cilia@enron.com
                                         cc:     john.novak@enron.com, "Brian
                    09/29/2000           Bradshaw" <BBRADSHA@skadden.com>, 
"Thomas
                    05:25 PM             Weil" <TWEIL@skadden.com>
                                         Subject:     Preliminary Engineering 
Release
                                         Agmt. - final issue





ESA and EECC teams,

This email is in response to John Rigby's fax of 28 Sep with comments to
the Preliminary Engineering Release Agreement.

I am OK with all of John and Scott's proposed changes except the rider to
replace paragraph 1(c), which deals with who has the risk/gatekeeper role
on deciding whether an activity is "hard cost" or not.  While I would
prefer to keep a "Contractor shall not perform any "hard cost" activity"
-type prohibition in the contract, I understand that since financing is
really an Owner issue, and Owner wants off-balance sheet financing, making
sure no "hard cost" activity is performed is really an Owner issue.  Thus,
I have taken their basic language/concept and modified it somewhat.

I have marked up EECC's proposed rider and attached the marked copy for
your review.  If acceptable to the owner team, I will forward it to EECC
for their review/approval.  Once we have agreement on this language, the
Preliminary Eng Release Agmt should be done and ready for John Novak's
review and approval and subsequent execution by ESA and EECC.

David E. Gohlke
Skadden, Arps, Slate, Meagher & Flom LLP
1600 Smith Street, Suite 4460
Houston, Texas 77002
direct (713) 655-5158
fax - main (713) 655-5181
dgohlke@skadden.com



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This e-mail, and any attachments thereto, is intended only for use by the
addressee(s) named herein and may contain legally privileged and/or
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e-mail, you are hereby notified that any dissemination, distribution or
copying of this e-mail, and any attachments thereto, is strictly
prohibited.  If you have received this e-mail in error, please immediately
notify me at (212) 735-3000 and permanently delete the original and any
copy of any e-mail and any printout thereof.

Further information about the firm, a list of the Partners and their
professional qualifications will be provided upon request.

(See attached file: 39148_2.doc)



------------------------------------------------------
This e-mail, and any attachments thereto, is intended only for use by the 
addressee(s) named herein and may contain legally privileged and/or 
confidential information.  If you are not the intended recipient of this 
e-mail, you are hereby notified that any dissemination, distribution or 
copying of this e-mail, and any attachments thereto, is strictly prohibited.  
If you have received this e-mail in error, please immediately notify me at 
(212) 735-3000 and permanently delete the original and any copy of any e-mail 
and any printout thereof.

Further information about the firm, a list of the Partners and their 
professional qualifications will be provided upon request.

 - 38012_9.doc