Randy,

What we wanted to look at on the gas side would be a three way ring trade t=
hat is out-of-the-money on one side and in-the-money on the other.=20

For example:

Counterparty A sells to Enron a jan02-dec02 nymex swap at current market + =
$2
Enron sells to Williams a jan02-dec02 nymex swap at current market + $2
Williams sells to Counterparty A a jan02-dec02 nymex swap at current market=
+ $2

There will be no net position change for each counterparty, but if will rep=
lace Counterparty A's Enron credit exposure with Williams.

All the trades would fall within our existing ISDAs. Our lawyers have added=
some language for the confirms that would tie the trades together. That la=
nguage is included below. If you have any legal questions feel free to call=
our lawyer Mark Taylor at 713-853-7459.

If you have any questions feel free to call me at 713-853-7058. I'll ring y=
ou latter this afternoon to go over the details and talk about possible cou=
nterparties.

Thanks for your time.

Geof Storey

"Each of the parties to this Agreement recognizes and acknowledges that the=
parties are acting and agreeing to perform their obligations hereunder in =
reliance upon (i) the timely execution and delivery by [legal name of other=
counterparty] ("Third Party") and Party A of a transaction in substantiall=
y the form attached hereto as Exhibit A ("Third Party Transaction A") and w=
ould not otherwise agree to execute, deliver and perform under this Agreeme=
nt if Third Party and Party A were not contemporaneously executing and deli=
vering Third Party Transaction A and (ii) the timely execution and delivery=
by Third Party and Party B of a transaction in substantially the form atta=
ched hereto as Exhibit B ("Third party Transaction B") and would not otherw=
ise agree to execute, deliver and perform under this Agreement if Third Par=
ty and Party B were not contemporaneously executing and delivering Third pa=
rty Transaction B. The effectiveness of this Agreement shall be subject to =
the condition that contemporaneously with the execution and delivery of thi=
s Agreement Party A and Third Party execute and deliver Third Party Transac=
tion A and Party B and Third Party execute and deliver Third Party Transact=
ion B."