Panhandle lateral operations ,
 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
darrell.schoolcraft@enron.com, susan.scott@enron.com, 