Kim:

I would argue that the physical premium should actually be ($.012/MMBtu) as you are displacing gas that would have to be sold as indexed.  That said, we have never done it that way.  My thought is that you would simply do it at the swap offer and have no physical premium arguing that that approach still leaves the desk better off compared to a sale at minus .012.  You could book it as a physical sale with no phyisical premium.

C


To:	Chris H Foster/HOU/ECT@ECT
cc:	 
Subject:	Citizens

Chris,

The deals I do with Tom Broderick, are these volumes priced at I-.012 as well, or when I fix the prices, do I need to add a new phys premium?