Union Gas Limited - Synthetic Storage ,
 This morning I called Union to inquire about an imbalance statement for Apr=
il 2002 primarily because the statement that I received for April 2002 was =
missing the park and loan balances for contract HUB210E14, HUB210E28 and HU=
B210E29, totaling roughtly 1,461,431 mmbuts due Union.  In turn, I was refe=
rred to their Legal Dept. and spoke with Larry Fedchun (519-436-4690).  He =
informed me that because ENA owedUnion way in excess of the value of this g=
as, they have decided to net this gas due them against everything that they=
 owed ENA.  I asked how they valued this gas and he said they went through =
several pricing models and scenarios yielding anywhere from $13MM to $16MM =
and finally settled upon somewhere around $13MM as the value of the gas due=
 them on a volume of 2,528,557 mmtus (per the Mar. 2002 statement that show=
ed the outstanding volumes).  We are currently showing this gas in our syst=
em as gas owed to Union and we are carrying it at a $0.00 value because it =
was classified as synthetic storage.  Please let me know your thoughts on t=
his and how we need to proceed.  If you need copies of any statements, plea=
se let me know.


Thanks,
Rita
chris.germany@enron.com, ruth.concannon@enron.com