This is good information.  One other thing that wasn't mentioned was the fact that all of the partnership documents are in the name of LRCI (and other wholly owned affiliates of ENA - but not ENA itself), while the storage and transport agreement is in the name of ENA [Gerald - I think this is right].  My guess is that this may further strengthen Mark's belief that the arrangements should not be linked.
 
Based on Mark's conclusion - I would like to get together internally to figure out what should be done on the storage and transport agreement.  It might be in the best interest of the creditors to give Bridgeline a sense that we might be rejecting the agreement so that they can line something else up (thereby mitigating the harm to the partnership and indirectly to ENA as a 40% interest owner).
 
Stuart
 

-----Original Message----- 
From: "Mark Ellenberg" <Mark.Ellenberg@cwt.com>@ENRON [mailto:"Mark Ellenberg" <Mark.Ellenberg@cwt.com>@ENRON] 
Sent: Fri 1/11/2002 7:51 PM 
To: Nemec, Gerald 
Cc: Redmond, Brian; Zisman, Stuart 
Subject: Re: Bridgeline Transport and Storage




baed on what i read in your e-mail, these are distinct contracts that would

be viewed in isolation for purposes of rejection.  bridgeline's position is

at best creative and i would give it little to no chance of success.



                    "Nemec,

                    Gerald"               To:     mark.ellenberg@cwt.com

                    <Gerald.Nemec@        cc:     "Zisman, Stuart" <Stuart.Zisman@ENRON.com>, "Redmond, Brian"

                    ENRON.com>            <Brian.Redmond@ENRON.com>

                    Office:               Subject:     Bridgeline Transport and Storage

                    01/11/02 07:27

                    PM






Mark,  In discussion with Bridgeline Holding LP's bankruptcy counsel today,

he stated that he thought ENA would be unable to reject that storage and

transport contracts with Bridgeline without ENA also rejecting the

Partnership Agreement for Bridgeline.  What are your thoughts on this?

Their counsel's argument was that these long term contracts were part of

the consideration for TEPI to enter into the LP and as such ENA would not

be able to escape the obligations of these contracts and still obtain the

benefits of the LP.

Some background:

Bridgeline Holdings, L.P. was formed in March of 2000 with ENA holding 40%

equity and Texaco Exploration & Production, Inc. holds the other 60%

equity.  Management of the LP is 50/50.  ENA and TEPI both contributed

natural gas pipeline assets located in Louisana into the Partnership.  ENA

entered into a long term storage and transport agreement (the ones you have

seen) at the time of the closing of this deal.  These agreements call for

monthly demand charges.  There is also a letter agreement concerning early

termination of the storage and transport agreements.    The letter states "

You [ENA] acknowledge and agree that such termination fees are necessary to

induce TEPI to enter into that certain Amended and Restated Limited

Partnership Agreement".  The letter goes on to set out the specific LDs

payable by ENA to TEPI upon their early termination.

You may need more facts than these.  Let me know if you need more info.


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