Great--the front running ideas now are (1) an operational sale in the San 
Juan of the 20,000 we recieve there and an offsetting operational purchase 
(less basis differential) at some other location (i.e., the permian) thus 
freeing up 20,000/d of physical space on the lateral; or (2) an exchange 
agreement under which a party takes our 20,000 in the SJ and gives us back 
the same amount, less basis differential, in the permian.  The SJ 20,000 
would still physically flow down the lateral, but it would have to move under 
someone's transport agreement--in other words it wouldn't be incremental to 
our 850,000/d of firm transport obligations.  I don't know if this will work 
yet, but it was a creative idea by Keith and Donna.  I'm eager to talk to 
Steve Harris and Susan about this because it sounds similar to a scenario 
that Susan researched  a while ago and that Lindy explained to me--maybe 
there are problems or solutions yet to be considered.  DF     




Keith Petersen
12/14/2000 04:07 PM
To: Mary Kay Miller/ET&S/Enron@ENRON
cc: Donna Martens/ET&S/Enron@ENRON, Maria Pavlou/ET&S/Enron@ENRON, Drew 
Fossum/ET&S/Enron@ENRON 

Subject: Gallup Expansion

Today we had meeting to discuss the filing for the 10 MMcf/d expansion.  
Donna covered her needs so that a filing draft can be sent out on 12/15/00.  
There was discussion on the possibility of having an Open Season.  Drew 
covered his thoughts of not having an Open Season and building the project At 
Risk.  Once we are ready to put the changes into service we would post the 
capacity.  At this time Donna has received all of her information is putting 
into a draft.

After our meeting this morning, we discussed the possibility of moving only 
the 850 MMcf/d on the San Juan lateral and not include the 20 MMcf/d of 
fuel.  If we are to only move the 850 MMcf/d, the changing of horsepower may 
not be needed (I have a call into Ron Matthews for the answer).  The reason 
we are asking this question is save capital dollars and speed up the in 
service date.  Planning has said that any change we make at the Gallup 
station will not work for the main expansion.  Drew and Maria are looking for 
a way to bring the fuel or a portion of the 850 MMcf/d in at another point 
(Drew to explain in more detail).  The reason we are asking these questions 
is that engineering says the project will not be ready for service until the 
third quarter of 2001.  We may miss an opportunity.

I will be in early tomorrow or you can reach me at home tonight after 9:00 PM 
(896-1025), if have any questions.

Keith