George,

I just talked to Rich.  I told him about the timing of the settlement 
proposal and that we should hear back late next week.  I also suggested that 
if we get a negative response, that you and i would give him a call and 
update.   He is being patient but I have a feeling that it has its limits.  
His response is logical to this point because as he stated, there should be a 
lot of money in this for both parties and thus a commercial settlement.

Mike


   
	
	
	From:  George McClellan                           02/06/2001 05:53 PM
	

To: Mike McConnell/HOU/ECT@ECT
cc: Gail Brownfeld/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 
Subject: Sempra

I left you a voice mail regarding Sempra and Kinder Morgan.  Details as 
follows:

We will make a revised settlement offer to Sempra by the end of this week.  I 
doubt that Sempra will accept our offer.  If they fail to accept, we will 
head into a litigation track - which means no synfuel will be produced at 
Pier IX until the court decides on who wins the case.  We expect the case to 
go to court in the fourth quarter of this year.

As I previously advised, Kinder Morgan has been very patient with us during 
this process.  At some point in time we will have to address their claims, 
which by definition will have to go through us in order to reach Sempra.

Let me know if I can provide any additional information.

George