---------------------- Forwarded by Thomas A Martin/HOU/ECT on 03/20/2001 03:50 PM ---------------------------


Thomas A Martin
10/10/2000 05:27 PM
To:	Patrick Wade/HOU/ECT@ECT
cc:	 
Subject:	HPL Transportation and Storage

Patrick,

I forwarded the information regarding the variable costs of transportation to Ed McMichael as you requested.  The storage has no forward value, it was included to take advantage of opportunities as they occur.  I want to be clear AGAIN about how the transportation transaction should be accrual upside and not booked as MTM as our view is that the spreads will compress over time and any spread value that exists from the curves today will likely go away or be significantly reduced over time .  I thought Lavorado was very clear that he did not want to book MTM value against these deals.  Am I missing something?


Tom