Ken:

Enron Transportation Services Company (ETS) and El Paso Gas Pipeline Company 
(El Paso) have entered into a Memorandum of Understanding (MOU) to jointly 
analyze and develop an Alaskan Natural Gas Pipeline Project (tentatively 
named North Star Pipeline).  Both parties did not want to press release the 
MOU.

The MOU only commits us to jointly study, evaluate and fund a project 
proposal.  It can be canceled at any time, for any reason, and is not an 
exclusive.

The "Alaskan Producers" are telling us they want to team-up with someone who 
can help them get the gas to the markets.  Four (4) Bcf of incremental 
supplies just cannot be directed to a market hub...i.e., Chicago, for 
instance.

Our goal with El Paso is to develop a joint market assessment of where the 
demand for incremental supplies is needed and then develop a total project 
that would get the gas to the various markets.

Our ownership of NNG, TW and NBPL and El Paso's ownership of ANR, El Paso and 
Tennessee will cover a lot of impacted pipelines.

I believe our best bet as of now is not to commit to a specific route or 
project (i.e., Hoglund's), but work with the producers on a total delivery 
system...wellhead to city gate/burner tip.

Your thoughts would be appreciated before we move too far in this direction.

Stan

P.S.  My guess is we would look at a 10% to 15% interest in a project 
financed (75%) pipeline.