These are my notes on flowing gas.  Tetco will be the problem pipeline.  I called my rep again and asked her to seriously look into it.  I'm thinking worse case is they will need either cash or a letter of credit for about $1,000,000.00.  I'm using the following formula

	MDQ (22,000 dth) x 20 days x $ some cashout price 

They may cut back on the number of days but the cashout price is the problem.  It's a moving target and I expect prices to go up.  I think that if we just agreed to give them a letter of credit for $1 mill and then prepay for any actual expenses we incur, we could build our reputation on the pipeline, at least until we get rid of these deals.  If all the gas flows like it should, we should never have any actual expenses on any of these pipelines for the Keyspan deal.

Who knows what volumes are going to be?

 -----Original Message-----
From: 	Germany, Chris  
Sent:	Monday, January 28, 2002 3:30 PM
To:	McMichael Jr., Ed; Greif, Donna; Lamadrid, Victor; Barbe, Robin
Cc:	Garza, Maria; Kelly, Katherine L.; Germany, Chris; Concannon, Ruth; Olinger, Kimberly S.
Subject:	Transportation notes for Feb

I have released the Boston Gas capacity on Tennessee, contract 29667, and Iroquois, contract 1250-08, to Boston Gas, non-recallable, subject to bid (per Boston Gas's request), for Feb 1st for one month only.

Other transport notes;

To serve the Lilco deal, we need supply on Texas Eastern, Tennessee, and Transco.

Texas Eastern is trying to decide how to handle the cash out exposure.  There is no commodity expense on the type of agreement I am requesting but there is the possibility of cash out.  I think the exposure to Texas Eastern is minimal and it could be that Texas Eastern just wants to be difficult to work with.

We can still flow gas on our Tennessee pooling contract.

We need an IT contract on Transco.  Transco requires a prepayment or a letter of credit using the following formula, MDQ x 90 days x max it rate from Zone 1 to Zone 6 ($.5169).  I believe the Lilco volume on Transco is about 21,000 dth/day.  Therefore, we would need to give Transco a letter of credit for about $977,000.00.

I also believe that we could do a buy/sale on Transco and Texas Eastern and bypass the pooling process.


Donna, Victor,
I like to keep scheduling informed of all activity on my pipes.  I plan on copying Ruth, Kathy, Maria, and Kim on my emails.  Who should I include from scheduling?

Thanks