Subject: FM
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Date: Fri, 29 Dec 2000 15:58:00 -0800 (PST)

Some additional thoughts on the force majeure issue--i.e., are we cutting off 
shippers' supply due to force majeure?  

1.    If the gas at the point is out of spec on water, the answer is clearly 
no.  We're shutting in that supply due to our termination of a waiver of the 
tariff quality spec., not due to force majeure.  We have the discretion to 
grant or terminate waivers of the tariff in our discretion as prudent 
operators and so long as we don't discriminate.   If that gas is out of spec 
on any of the specific items listed in the "Quality" section of the tariff 
(Sec. 44?  47?  I can't remember which but its one of those) then the answer 
is the same.  

2.  If the gas is being shut in because of heavier hydrocarbons, I think the 
answer is the same as above if there is risk of those heavier hydrocarbons 
falling out as liquids.  I'm remembering the catch all section of the Quality 
paragraph as prohibiting "dirt, gums, and other impurities that would 
interfere with the operation of compressors, blah blah" or something to that 
effect.  That catch all seems to me to include liquids.  IF the c6 and 
heavier is going to form hydrates and fall out as liquids, then the people 
delivering those heavies to us are delivering out of spec gas--therefore no 
force majeure.   I read Eric's very scientific email and I think the punch 
line was that the heavy hydrocarbons may fall out as liquids--right?   The 
thing I can't remember is whether the Quality section has specific max. 
limits on the individual heavier hydrocarbons.  If so, and if the shippers 
are within those limits, my theory based on the catch all language doesn't 
work as good.  

3.  If we think we need to claim force majeure, we have a problem, because we 
could have bought our way out of this situation for a nickel.  Generally, an 
event isn't force majeure if it is purely economic.

I'll think about this some more tomorrow and give you guys a call.  DF