----- Forwarded by Gerald Nemec/HOU/ECT on 01/03/2001 05:10 PM -----

	Ken Choyce@ENRON
	12/20/2000 04:49 PM
		 
		 To: Gerald Nemec/HOU/ECT@ECT
		 cc: Brian Bierbach/NA/Enron@Enron
		 Subject: Hanover Letter Agreement

Gerald,

As we discussed earlier, following is a list of the high points agreed upon 
in yesterday's meeting with Hanover.  Hopefully this is enough to get a draft 
of a letter agreement going.

- the compression services agreement will be terminated
- there will be a 90 day transition period starting 1/1/01within which 
Crestone will build up an operations and maintenance strategy
- during the 90 day transition, Crestone will make an election as to whether 
we want all of the O&M, part of it, or recontract with either Hanover or 
another 3rd   party  (basically we want the flexibility to do anything we 
want).
- Hanover will provide to us a rate stucture that will be in effect during 
the 90 day transition.  We talked about covering their costs (under a flat 
monthly fee) plus  a 15 to 20% markup.  We also agreed to meet with them very 
soon to define exactly who does or pays for specific services.
- We will need to address the way new units will be ordered in the future.  I 
have not worked on this yet.
- Hanover made the committment to maximize on line availability of their units
- There will be a 2 year term during which Hanover will be Crestone's 
"preferred provider" of either rented or purchased machines.  This needs to 
be   structrured so that we dont necessarily have to use them.The term will 
start 1/1/01.

Thanks for your help.  Let me know if I can fill in some of the details for 
you.

Ken