Gentlemen,

Attached for your review and comment is the Cavern Monitoring Services 
Agreement for your review and comment.



Thanks,

Eric Gillaspie
713-345-7667
Enron Building 3886
----- Forwarded by Eric Gillaspie/HOU/ECT on 08/08/2000 09:21 AM -----

	Eric Gillaspie
	07/27/2000 05:16 PM
		 
		 To: Gerald Nemec/HOU/ECT@ECT
		 cc: Gerald Lofton/HOU/ECT@ECT
		 Subject: Re: Cavern Monitoring Services Agreement

I will make the necessary changes to the agreement.

Eric Gillaspie
713-345-7667
Enron Building 3886
----- Forwarded by Eric Gillaspie/HOU/ECT on 07/27/2000 05:15 PM -----

	David Marshall
	07/27/2000 04:55 PM
		
		 To: Eric Gillaspie/HOU/ECT@ECT
		 cc: 
		 Subject: Re: Cavern Monitoring Services Agreement

Eric,

Our usual position is the Operator takes his own employee injury risk and the 
third party injury risk arising out of his scope of work, and he provides us 
with proof of insurance for these risks prior to commencing services under 
the agreement. We would typically agree to limit his liability to us to a 
specified amount (value of the contract), but not agree that this limitation 
applies to his indemnity obligations due to employees or third parties making 
claims due to events arising out of his scope of work (I didn't catch any 
limitation of liability language as repects the parties).  These risks are 
the subject of his insurance coverage, which we'd expect to apply for the 
defense of both parties to the agreement.   From a cost standpoint, an 
operator will have these coverages already and would not be buying additional 
insurance for our job.  

To the minimum coverages descirbed in 6.1, I suggest adding (d) Umbrella 
Liability Insurance to apply in excess of the limits shown in a, b (employers 
liability) and c above, with limits of liability not less than $10,000,000 
per occurrence/aggregate, and providing coverage subject to terms and 
conditions at least as broad as those of the underlying policies.  Texaco may 
resist or argue for some cost pass through for any additional limits, but 
certifying to only $1MM in GL limits seems a bit light given the exposure.

6.2 Policy Requirements (iii) 'enforced' should be changed to 'endorsed'
Suggest adding:  (iv) be endorsed to apply as primary insurance and without 
right of contribution from any similar policies which may be maintained by 
LCRI.
All applicable deductibles or self insured amounts shall be the sole 
responsiblity of Texaco.