---------------------- Forwarded by Sara Shackleton/HOU/ECT on 11/05/99 09:37 
AM ---------------------------
   
	Enron North America Corp.
	
	From:  Patricia Cini                           11/01/99 09:07 AM
	

To: Susan Bailey/HOU/ECT@ECT
cc: Sara Shackleton/HOU/ECT@ECT, Rodolfo Freyre@Enron 
Subject: TGS SWAP - Almost there...

Susan-

Please fax or e-mail the first revised draft of the ISDA to Rodolfo.  I 
believe that TGS is ready to execute this document except for a pending 
question that they have concerning speculation.  I am not sure what the issue 
is exactly for TGS in regards to speculation (see e-mails below), but I am 
calling Rodolfo for clarification.

Also, do you know who could forward a sample copy of a confirmation to 
Rodolfo as well??

Thank you,

Pat



---------------------- Forwarded by Patricia Cini/HOU/ECT on 11/01/99 09:02 
AM ---------------------------
Rodolfo Freyre @ ENRON_DEVELOPMENT   10/29/99 10:28 AM

To: Patricia Cini@ECT
cc:  
Subject: TGS SWAP - Almost there...


Pat, 

Question: If you hedge something and then you do not produce (you do not back 
up your production with your swap), so basically you are speculating, how 
does that affect your financials??
TGS's lawyer will be back next Monday. I know you and Susan have worked on a 
new ISDA (w/o the CSA). Could you forward that to me so I send it to TGS and 
on Monday they have all the documents ready please?
TGS asked me if we could send them a model of a "confirmation ticket" to see 
how it looks like. Also, I would like to see it as well, cause I never seen 
one. I guess that you will put price, index, settlements and volumes.

Thanks,

Rolo
---------------------- Forwarded by Rodolfo Freyre/ENRON_DEVELOPMENT on 
10/29/99 11:37 AM ---------------------------
Rodolfo Freyre   10/29/99 11:01 AM

To: Don Black/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Federico 
Cerisoli/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jeff 
Kabel/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Brian 
Swinford/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Joe 
Kishkill/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  

Subject: TGS SWAP - Almost there...


I talked to Eduardo Pawluszek (TGS) this morning. So that everybody knows, 
last week we quoted propane, butane and gasoline. Citibank and Goldman Sachs 
have also quoted, but Enron came up with the best price. Eduardo told me he 
is ready to go, but he is still trying to waiting for Marketing to define 
volumes.
What the auditors are saying is that if TGS hedges 2,500 tons during one 
month and they end up selling 0 tons, the hedge is now pure speculation. This 
is the main problem Eduardo is having.   We need to communicate that the risk 
on price over the next 14 months is far more that the risk of a slight 
shortfall in delivery over the same time period.  Which is the greater 
speculation??
On the ISDA, his lawyer will be arriving on Monday and we will keep on 
working on the document next week. 
Eduardo told me he is totally on board with this hedge  but he is trying to 
convince Marketing to go for it (and it is giving him a hard time).

We are plannig to pre-pay this swap which, considering current financial 
circumstances, would benefit TGS greatly.

Do we need to go higher up in the organization??  

Thanks,

Jeff and Rolo