Daren,

Thank you for the proposal, I look forward to discussing this further with
you over the next week.

Dave




                    "Farmer, Daren
                    J."                     To:     <DyckD@valero.com>
                    <Daren.J.Farmer@        cc:
                    enron.com>              Subject:     Valero RFP Issued June 1, 2001

                    06/29/2001 04:29
                    PM





David,

In response to the RFP you issued on June 1, 2000 for electric power and
natural gas supplies, Enron would like to present the following offers
for your gas supply in Texas:

For deliveries to the Corpus plant:
           10,000 Mmbtu per day, priced at Inside FERC Houston Ship Channel
less $.04 for a term of one year.
           or
           10,000 Mmbtu per day, priced at Inside FERC Houston Ship Channel
less $.035 for a term of two years.

For deliveries to the Houston plant:
           10,000 Mmbtu per day, priced at Inside FERC Houston Ship Channel
less $.005 for a term of one year.
           or
           10,000 Mmbtu per day, priced at Inside FERC Houston Ship Channel
flat for a term of two years.

For deliveries to the Clear Lake Plant:
           10,000 Mmbtu per day, priced at Inside FERC Houston Ship Channel
less $.005 for a term of one year.
           or
           10,000 Mmbtu per day, priced at Inside FERC Houston Ship Channel
flat for a term of two years.

Under this offer, Enron reserves the right to serve the plants from any
of the pipelines listed under Appendix D:  Table 2 of your RFP (HPL,
EPGTT, Kinder Morgan).  I appreciate your review of this offer.  Please
contact me at 713-853-6905 with any questions or comments.


Thank You

Daren Farmer
Enron North America
Ph:  713-853-6905
Fax:  713-646-2391
E-mail:  dfarmer@enron.com