John,

I met with Ben regarding the Precedent Agreement this evening.  He had the 
following questions/comments:

1. "...Shipper's power plant construction by August 1, 2001, then either 
Party may terminate this Precedent Agreement by providing the other Party 
written notice of such termination.  ; provided that such right to terminate 
must be exercised on or before August 3, 2001.  In any event, unless the 
Shipper provides written notice to Transco on or before August 3, 2001 that 
it will enter into a Service Agreement , the Precedent Agreement will 
terminate automatically.

2. Can we make the Guaranty effective after August 3, 2001 if we do not 
terminate the Precedent Agreement?

3. In talking to Gerald Nemec, it also occurred to me that we need to 
determine any balance sheet effects of the Guaranty in relationship to this 
project.  I will check on this tomorrow and let you know.


Thanks.


RDG