Gerald,

We want to do a transaction with Falcon Gas where we provide them with base gas for pressure in their facility.  We basically would park gas in their facility until Jan./04 to provide pressure.  We are making two (mutually exclusive) proposals.

Proposal 1:
Park 2 Bcf of gas on October and November 01 (33,000/day), this gas would be delivered at the Lone Star WA line where it connects to the Hill Lake storage facility (Hill Lake is building a lateral that would connect to the bigger and better connected Lone Star's "X" line, this will be ready by the time we pull out our gas).
Redeliver the gas to ENA at the interconnect of the Falcon lateral to the "X" line on January 04 (66,000/day).  The redelivery would be done all in one month (the lateral and compressors would be in place to allow for delivery in one month).

Proposal 2:  Same transaction as #1 except that:
We may get the option to convert 10% of our base gas to working gas (and therefore withdraw it) on the previous January (03).

Please let me know if you want to meet to talk about the details.  I'm attaching the draft term sheet for your review and editing (it is pre-credit but post desk pricing).


 

Miguel E. Vasquez
Manager -- Enron Storage Products
1400 Smith Street
Houston, TX 77002

713.853.3910
Fax: 713.646.8416