Cool--my law beanie is getting a little tight lately.  Stan communicated to 
Oneok that we want to keep the dialogue going and that arbitrating the 
measurement issue is necessary so we can clear it out of the way and allow 
everyone to focus on bigger issues.  I don't know if they bought it, but if 
we approach them (maybe at the Stan level) with potential business deals it 
will tend to validate the message Stan sent them.  We haven't heard anything 
since we launched the arbitration on Friday, so I'm not sure if they are 
ballistic or not.  Given Stan's message to them (Kathy--pls forward Stan's 
letter to Jeff) I think he ought to either raise the West Texas line himself 
or else tee it up by calling his counterparts and letting them know what were 
up to so there is no confusion.  Maybe you or Harris could bring it up at the 
Mon. meeting or sooner if necessary.   Let me know if you want me involved in 
that conversation.  Thanks. df


From: Jeffery Fawcett/ENRON@enronxgate on 02/27/2001 02:54 PM
To: Drew Fossum/ET&S/Enron@ENRON
cc:  

Subject: Pemex-Enron Project

Drew,
Here's a chance to wear your honorary Marketing beanie.  If you read the note 
below, we're engaged in very preliminary conversations with PEMEX with the 
idea that maybe TW/NNG could offer a viable alternative to EPNG to move gas 
into Mexico through the Samalayuca lateral (commencement point located 
approx. 50 miles east of the city of El Paso).  New construction would 
involve approx. 150 miles of pipeline and associated compression to tie into 
the existing TW/NNG systems near Waha.  Notwithstanding PEMEX's desire to 
move off EPNG for a portion of the load, I don't think the economics will 
work. 

However, KN Energy (now Kinder) used to own a line they acquired through 
Westar (they acquired it from El Paso Products Co.) that runs from Waha 
westward to a point near the city of El Paso.  It's primarily a 20" line, and 
it currently serves El Paso Electric Co. and several directly connected 
industrial customers.  As a KN operation, it typically didn't run full.  I 
see the acquisition of this line as one possible way we could serve both the 
existing markets as well as incremental volumes to PEMEX at a rate that might 
work for them.  I completely spaced on the fact that Kinder sold many of its 
south system assets (including this West Texas line) to Oneok last year.  If 
we are to pursue this idea, then we're forced to dealing with Oneok.

I know that we're in deep dog poo with Oneok right now regarding Bushton.  My 
question is, are we in any kind of position to talk to Oneok about this 
asset, considering  the legal status of our dispute at Bushton?  Also, does 
our desire (potentially) to own this asset create any kind of negotiating 
currency with Oneok on the Bushton issue?

I'd appreciate your thoughts.  We're due to have Pemex in our offices next 
week.   Thanks!


 -----Original Message-----
From:  Fawcett, Jeffery  
Sent: Thursday, February 22, 2001 3:19 PM
To: Harris, Steven; Scott, Susan; Matthews, Ronald; Robertson, Audrey; 
Schoolcraft, Darrell; Faucheaux, Eric; Gottsponer, Morgan
Subject: Pemex-Enron Project
Importance: High

Pemex has approached Transwestern with the idea of Transwestern building an 
interconnecting pipeline between the current EPNG/Samaluyca interconnect at 
EPNG's Hueco compressor station and TW's facilties in West Texas.   Pemex has 
indicated they might move as much as 300,000 MMCf/d on the lateral, although 
the email below shows increments to only 200,000 MMCf/d.  Pemex is well aware 
of the fact that the lateral will not be an inexpensive proposition, but they 
claim to see another supply option (other than EPNG) as necessary, 
particularly in light of EP Merchant's behavior regarding their ownership of 
the large 1.2 Bcf/d block of EPNG capacity.

To this end, I've arranged a meeting (originally set for Mexico City, now in 
Houston) to sit down face to face with Pemex and discuss this project.  
They'd like us to be a specific as possible and set the email below to assist 
us in our design considerations.

I see this project being one of possibly two separate projects.  First, we 
could re-establish a dialogue with Kinder Morgan to see if they'd be 
interered in talking to us about an ownership position in their West Texas 
line.  Secondly, we could build new pipe to TW/NNG.

With respect to NNG, I think there's definitely an opportunity to promote the 
use of the NNG South end as a potential supply/services source.  Not only 
does NNG have a full range of storage and line pack services, but they could 
possibly bring Trailblazer gas from the Rockies down to serve this load.

Audrey, if you would, please set us up for meeting here in Houston on Friday, 
March 9, 2001 beginning at 9:00 a.m.  We need a conference room for about 10 
people from 9-12.  I'd like a coffee/juice/rolls setup for this meeting if 
possible.  Also, check with me as time draws near and we can arrange a place 
to take them to lunch.  I think we can finish our business with them at lunch 
time and make plans for our next steps.

 -----Original Message-----
From:  jrojas [mailto:jrojas@gas.pemex.com] 
Sent: Wednesday, February 21, 2001 7:54 PM
To: Jeffery.Fawcett
Cc: lpadilla
Subject: Pemex-Enron Project
Importance: High

Jeff,

As we talk this morning we are interested on developing a new project
with your company that could take gas into EPNG,s Hueco compressor
station located in Hudspeth County, Texas.

The preliminary information we can give you in order to move forward
with the project is this:

Receipt point:                            Transwestern and NNG
Delivery point-                            Hueco Compress Station
Delivery Pressure-                      840 psi
Volume                                     100,150 and 200 MMBTU/day
Term                                         10,15 and 20 years.


The information we would like to receive from you is:

1.         Permissions you will need to get in order to build the
interconnection FERC, RRC, EPNG, others (timing for those permissions)
2.         Time to build the interconnection
3.         As we understand, you as interstate pipeline need to post the
capacity at the EBB, how much time would it take?
4.         Rates and fuel charges that apply for all your system
(Transwestern and NNG)
5.         Estimated cost for the new interconnection facilities.
6.         Supply areas that we can access
7.         Storage Facilities


We hope that with this information you can run your first numbers about
how we can make this project work and we can have some distance walked
for our upcoming meeting on march 9th, 2001

Thank you in advance for the help and if you have any question don,t
hesitate to give me a call.

Sincerely yours(

Jorge F. Rojas Zepeda
Natural Gas Marketing Transportation
MGI Supply, Ltd.
An affiliate of Pemex Gas y Petroqu?mica B?sica
Phone: 525-232-59-87
mailto:jrojas@gas.pemex.com



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