Capacity Marketing - TW sold 35,000 MMBtu/d of firm transport to Sempra Energy Trading at a negotiated rate of $0.50/MMBtu plus fuel for the two year period beginning January 1, 2004.  The path is from Blanco to SoCal Needles; contract value is $12.8MM.  In addition, Sempra waived its right to utilize its call option for 21,500 MMBtu/d of capacity at $0.30/MMBtu during this two-year period.

TW also sold 14,000 MMBtu/d of firm transport to Calpine for two years beginning Jan. 1, 2004 at a floating rate based on the difference between the California border and the San Juan Blanco indices.  The primary delivery point is Calpine's newly constructed power plant on the Topock lateral.  The floating price can currently be hedged to yield a gross margin of $0.80/MMBtu, with a contract value (net of fuel) of $6.1MM.

BP/Amoco was one of several interested parties last week as TW marketed the remaining large blocks of our East capacity.  BP has come back to TW with an offer, based on available space, of $0.02/MMBtu for demand plus a sharing mechanism for alternate deliveries west.  The proposed term is for 2001 April - October.  We are working with Facility Planning to determine the available space.

Gas Inventory - TW continued to experience high line pressure and pack out west this week.  This necessitated an additional sale of line pack gas of 15,000 MMBtu for a gross revenue of $277,500.

El Paso Natural Gas Co. - Bids were due Monday (2/12) for the 1.2 Bcf/d of west capacity on El Paso.  They marketed the space in 5 blocks of various capacities;  minimum bid was 100% of the max California reservation rate for a minimum term of 1 month.  Market intelligence indicates over 144 bids were submitted for max terms of 5 years.  El Paso indicated the award announcement will be made the week of 2/19.  El Paso Merchant will likely exercise their ROFR right and take the space at max rates for 5 years.