---------------------- Forwarded by Todd Peterson/ENRON_DEVELOPMENT on 
03/06/2001 01:53 PM ---------------------------


"Kurman, Michael" <kurmanm@arentfox.com> on 12/12/2000 08:34:17 AM
To: "'Todd.Peterson@enron.com'" <Todd.Peterson@enron.com>
cc: "Massey, Eugene" <MasseyE@ARENTFOX.COM>, "Basu, Sumanto" 
<BasuS@arentfox.com> 

Subject: COU Answers


Todd --

Following are some thoughts on Jane Michalek's questions.  We've discussed
these briefly with Gene (who is out of town on business); I expect he'll
first become available by Wednesday evening.  In the meantime, feel free to
contact me by e-mail (kurmanm@arentfox.com) or telephone (202/857-6345) if
you'd like to discuss.

Regards.

Question 1.    Is there a relevant "Port Authority" at the EcoEl,ctrica
terminal?  If not, why is this contained in the document?

Answer: Based on our previous inquiries, it is our understanding that the
Puerto Rico Ports Authority (referred in the document) has jurisdiction, and
that the Authority has a designated "Port Captain" with responsibility for
the harbors of Guayanilla, Tallaboa and Ponce.  We have not previously
determined the full extent of the Authority's functions and/or regulatory
authority.

Question 2.   In Section 2.1, is there an Attachment "A"?

Answer: Although Attachment A has not previously been prepared, it was
intended to be a verbatim listing of those marine and transportation-related
requirements that were set forth among the 47 listed items in the Appendix
(titled "Environmental Conditions and Mitigating Measures") to the FERC's
Order of May 15, 1996, granting EcoEl,ctrica authorization under Section 3
of the Natural Gas Act.  Among those which would be included are items #23
and #24 (relating to manatees and sea turtles).

Question 3.  Do the LNG Interests have an Emergency Response Plan? Does this
Plan have references to actions required in 7.1?

Answer:  An "Emergency Response Plan" is not referenced in the COU, and we
are uncertain as to the status regarding development or implementation of
any such Plan -- either from the Coast Guard perspective or that of the FERC
(see, e.g., item #45 of the FERC's Environmental Conditions and Mitigating
Measures).

Question 4.  Do the insurance requirements of the "vessel interests"
duplicate or override what is required of Cabot LNG in Section 6.2 of the
sales contract? Should  the LNG interests provide same insurance
documentation?  Ditto Section 12.

Answer: The insurance requirements in Section 6.2(b)(viii) of the Sales
Contract are general in nature. The insurance requirements in the COU -- a
four-party agreement contemplated by, but beyond the scope of, the Sales
Contract -- supplement the Sales Contract provisions and apply to the
liability limits set forth in COU Clause 10.

Regarding insurance documentation under Clauses 11 and 12, we assume that
the LNG Interests could agree to mutual obligations (see, e.g., Clause 11.2
as to documentation by the Vessel Interests).  However, we note that the COU
is essentially geared towards an "Incident," and as an Incident is caused by
an LNG Tanker, the Vessel Interests are the focus of Clauses 11 and 12.