Subject: Panhandle lateral operations
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked]
Date: Wed, 21 Feb 2001 08:01:00 -0800 (PST)

Currently, TW isolates a portion of the Panhandle lateral to force production 
received into the pipe downstream of the P-3 compressor station to physically 
flow north east, to a interconnect with Northern.  The POI's downstream of 
this block valve are removed from the IT template to avoid that an "all 
points" contract is tendered. This would allow the scheduling system to 
accept a nomination from these particular points to an "upstream" point, and 
we currently prohibit this.  

Historically, this gas was isolated to assure it flowed to an interconnect 
that would deliver into a process gas stream on Northern's mainline, for 
ultimate processing at Bushton or CMS's Beaver plant.  When shippers have 
requested that this gas be scheduled to markets other than NNG, (i.e. 
California or Waha) they were told it could not deviate from this 
predetermined path.

CMS has indicated they will no longer flow this gas to TW starting in March 
(volume is from 15,000 to 20,000 mmbut/d at an $0.08 rate), and will instead 
seek a pipeline that will allow them access to the West Texas and California 
markets.  Once this gas is diverted from our pipe it will not return.  

My questions are:

Darrell: Is there an operational reason why this gas can not flow south on 
the Panhandle lateral?  Is there a quality issue?  I recall the gas was 
diverted to NNG for the benefit OneOk and the Buston plant.  The asset sale 
we anticipated with KN never   materialized, and thus our attempt to load the 
buston plant from these facilities is not going to benefit us. 

Susan/Lee:  Can TW discriminate service if there is not a gas quality issue 
that would otherwise shut the gas in as unmerchantable?  We receive gas South 
of the block valve and it is able to flow on the Panhandle lateral to Waha 
and California markets.  The fact that this gas is downstream of a valve we 
closed for the convenience and benefit of NNG and OneOk is the only reason it 
can not flow to other points on TW.  Is this a supportable position if a 
shipper elected to challenge it?

Steve:  Do you think OneOk still expects this valve to be closed?  Would they 
object if it was opened?  If this gas goes to El Paso, it would be lost for 
processing by OneOk anyway.

Could we get together sometime Monday AM between 8:30 and 9:30 to discuss 
this?

Thanks, Bob