Capacity Marketing - We negotiated an extension of the 400,000 MMBtu/d east-to-east contract with Aquila / USGT this week plus improved the economics of their existing contract.  The extension, beginning November 2001, has a reservation rate of $.025/MMBtu with a 30% sharing of the Permian to Cal Border index spreads on all alternate westward flow.  As for their existing contract, we negotiated a $.15/MMBtu rate effective February 15 - October 31, 2001 on the alternate west flow, an improvement of $.11/MMBtu.  

In addition, we negotiated a similar east deal with alternate west flow with Astra Power LLC.  Their reservation rate is $.0325/MMBtu on a volume of 50,000/d for a term of March 2001 through March 2003.  

With the execution of these two deals plus the anticipated closing of the Public Service of New Mexico contract, this will effectively sell out the east end of the TW system through at least 2002.

San Juan Flow Conditioner - The decision was made this week to postpone till March the application of the Exxon/Nalco flow conditioner in the San Juan lateral.  Had we proceeded with the application in February (a tariff month), the minimum lost revenue impact for one day could have been $300,000.

SouthWest Gas - We received the fully executed OBA contract from SouthWest Gas this week.

Gas Inventory - With moderating temperatures out west reducing demand and shippers paying gas back to TW, we were experiencing high linepack for most of the week.  TW was able to sell 55,000 MMBtu at the border for a net revenue of $453,000.

Reliant - We negotiated a San Juan Pool contract for 20,000 MMBtu/d at max rates for February 6-28.  Reliant is flowing alternate out of path from San Juan to the border and scheduling 5,000 to 12,000 MMBtu/d.  Incremental revenue for this could range from $42,000 to $100,000 for the month.