Subject: FW: Pumping Station Power
From: [email-masked]
To: [email-masked]
Date: Thu, 15 Nov 2001 00:57:54 -0800 (PST)

Let's discuss.

Chris Hilgert
Enron Compression Services
Work: 713-853-7350
Cell:   713-857-2479
www.enron.com/compression

-----Original Message-----
From: Howell, Marion W. [mailto:[email-masked]]
Sent: Wednesday, November 14, 2001 8:11 PM
To: Hilgert, Chris
Cc: Owen, David; Sims, Ken C.; Badders, Russell A.; Stone, Jeff A.
Subject: Pumping Station Power

Chris,

This will confirm our discussions of today regarding accelerating completion
of electric power to the pumping station.

It is Enron Compression Services' (ECS') desire to accelerate the completion
of the project from the currently projected early May, 2002 completion date
to March 1, 2002.  ECS will agree to pay the acceleration cost.  Our current
"most probable estimate" of this cost is $630,000, but it could run as much
as $1,060,000 or higher.  ECS would like a guaranteed cap of $1,000,000.
Gulf estimates that the acceleration activities discussed with you will
provide a confidence level of greater than 90% that we can meet the March 1,
2002 date.  Both of us agree that we cannot give any guaranteed date because
of the inherent uncertainties.  Our budget for the line construction
contractor cost is $864,000, including accounting and other standard
overheads.  ECS would pay any amount over that.  Additionally. ECS would pay
$70,000 for accelerating the structure design and Hinsons Crossroads
Substation activities.  ECS would also pay approximately $130,000 to
accelerate acquisition of Right of Way.  We have faxed letters between Gulf
and attorneys for three property owners which shows the difference between
the parties.  ECS would like some assurances that cost is reasonably
minimized within the constraints of meeting the desired schedule.

The details and specifics of the above would be formalized in an agreement
to be signed between the parties.  Both parties acknowledge that time is of
the essence in completing the execution of a suitable agreement, lest the
start of acceleration of the project be delayed to the point that we would
not be able to meet the March 1, 2002 date.  

We also discussed the merits of developing a Memorandum of Intent for the
parties to quickly execute so that some of the acceleration activities can
begin as the agreement is finalized.  This agreement must be completed
within the next few days.

ECS also raised the prospect of two agreements, one to cover the Right of
Way, and another to address the line construction.

We will be faxing to you tomorrow a Gantt chart of a proposed acceleration
schedule.

Regarding the cost breakdown of the line construction cost, the following is
a typical cost by activities:

	Structure Framing and Setting			45%
	Anchors and Guys				10%
	Conductors and Static Wires 			30%
	Grounding					 5%
	Miscellaneous					10%

	TOTAL						100%

This should complete the information you requested.  Please call me if you
need more at this time.  We will provide you a draft of the Memorandum as
soon as possible.