Subject: Your Question on HMS
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Mon, 6 Nov 2000 04:38:00 -0800 (PST)

Dr. Lay:

As you know, Enron owns a minority interest in Hanover Compressor Corp.   On 
several ocassions, Mel Klein of GKH has discussed the possibility that Enron 
purchase GKH's interest in Hanover.  This is an option that ENA has not 
recommended to date, as I understand that at current prices we are more of a 
seller than a buyer.  Jeff Donahue is responsible for this investment and can 
answer any specific questions.

In respect to HMS,  Enron and Hanover established Hanover Measurement 
Services (HMS) as a joint venture to provide pipeline measurement services.  
HMS is structured as an (Enron:Hanover)  49:51 equity and 50:50 control 
partnership.  Enron and Hanover each have 2 representatives on the Board.

Enron (through Houston Pipe Line)  invested $2.5MM of initial capital in HMS 
and entered into a measurement service contract with HMS.  HMS has also 
entered into a service contract with Kinder Morgan and is seeking to enter 
into similar contracts with other pipelines.  

Potential HMS Topics of Discussion

1. Enron is in the processing of selling HPL - the service contract between 
HPL and HMS will be assigned to the  purchaser of HPL.  

2. Enron will retain its interest in HMS, but we are open to both Enron and 
Hanover selling a portion of our equity to a new pipeline/producer customer.

Regards,
Brian