Team,

As I mentioned in our HPL staff meeting we are investigating the merits of 
entering into a joint venture or another transaction structure that will 
position HPL to effectively compete in the Texas intrastate market.  Our 
primary objective is to gain access to additional sources of gas supply and 
achieve the required economies of scale to compete with other intrastate 
pipelines. I would appreciate your confidence and support in developing the 
optimal course of action for HPL and for Enron. 

The skills that we have developed in our group are critical to growing our 
Upstream Origination business in N. America, as well as to the ongoing 
operation of HPL.  Our origination strategy is to leverage our business 
operations, field operations, engineering, producer services, and marketing 
skills to capture value from transportation, gathering, storage and commodity 
opportunities on the gas/power grids.   We need our current employees to 
accomplish this objective across N. America.

We have proven our ability to add value to Enron by developing the 
Powder/Wind River pipelines, installing electric compressors, contracting for 
processing capacity, and establishing a new gas supply corridor along the 
Gulf Coast.  Our recent efforts to provide services such as business 
operations, measurement, trading/marketing, and accounting services to third 
party producers and pipelines also looks to be a promising growth opportunity.

It is very important to our ongoing business relationships and our 
competitive position in the market place that we DO NOT discuss HPL related 
matters with third parties.  Please come see me if you have any specific 
questions or concerns.  Also please refer any third party inquiries regarding 
HPL to Tim Determing.

Regards,
Brian
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