Exhibit 10.35.1

FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
AND CLOSING AGREEMENT

     This First Amendment to Purchase and Sale Agreement and Closing Agreement
(the “Amendment”) is dated as of this 1st day of June, 2004, and is an amendment
of that certain Purchase and Sale Agreement (the “Agreement”), dated the 25th
day of April, 2004, by and between TXU FUEL COMPANY, a Texas corporation
(“TXU”), and ENERGY TRANSFER PARTNERS, L.P. (“Buyer”), a Delaware limited
partnership. Any capitalized term used herein but not otherwise defined herein
shall have the meaning given to such term in the Agreement. TXU and Buyer may be
referred to in this Amendment individually as a “Party,” and collectively as the
“Parties.”

     For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the Parties, the Agreement is amended as follows:

     Section 1.01. Amendment.

     (a) Paragraph 5.4(c)(v) of the Agreement is hereby deleted in its entirety
and replaced with the following:

     (v) Severance Plan. Buyer agrees that, with respect to any Transitioned
Employee who executes the Agreement and Release, if it terminates such
Transitioned Employee following the ninetieth (90th) day of, and within the
eighteen (18) month period after, such Transitioned Employee’s Employment
Effective Date for any reason other than cause (as defined above), Buyer shall
provide such Transitioned Employee with severance benefits, in accordance with
Schedule 5.4(c)(v).

     (b) Exhibit A to the Agreement is deleted in its entirety and replaced with
Exhibit A attached to this Amendment.

     (c) Exhibit B-2 to the Agreement is deleted in its entirety and replaced
with Exhibit B-2 attached to this Amendment.

     (d) Section 5.12 of the Agreement requires Buyer and TXU to supplement or
amend the Schedules upon becoming aware of any fact, matter, circumstance or
event requiring that the Schedules be supplemented or amended. The Schedules
attached to this Amendment have been supplemented or amended by TXU since the
execution of the Agreement, and replace the corresponding Schedules attached to
the Agreement. The following Schedules are attached: 2.2(b); 2.2(c); 2.3; 2.4;
2.1 l(a)(v); 3.6; 3.8; 3.9; 3.10; 3.16; 3.20; 5.4(c)(v); 6.1(g).

     (e) The following Paragraph 5(c)(vi) of the Agreement is hereby added:

     (vi) Appliance and Energy Conservation Programs. Buyer will continue to
administer outstanding appliance and energy conservation programs by
Transitioned Employees in accordance with a Schedule to be provided by TXU.
Buyer will deduct the payments in accordance with such Schedule and remit such
payment to TXU.

 

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     Section 1.02. Adjustment to Effective Time.

     (a) Effective Time is defined in Section 2.6 of the Agreement as being 9:00
AM on the Closing Date. Notwithstanding Section 2.6 of the Agreement, and
provided the Federal Trade Commission does not take any action that would
prevent Closing on such date, then as of 11:01 pm Central Daylight Time on
June 1, 2004: (i) Buyer agrees (assuming TXU complies with its Closing delivery
obligations under Section 2.7(a) of the Agreement), that the Conditions to the
Obligations of Buyer to close, as set forth in Section 6.1 of the Agreement,
have been satisfied, (ii) TXU agrees (assuming Buyer complies with its Closing
delivery obligations under Section 2.7(b) of the Agreement), that the Conditions
to the Obligations of TXU to close, as set forth in Section 6.2 of the
Agreement, have been satisfied, (iii) the Closing will take place as of 11:01 pm
Central Daylight Time on June 1, 2004, and (iv) the wire transfer of the
Purchase Price will be initiated by Buyer immediately upon the opening of the
Federal Reserve Bank wire transfer service on June 2, 2004. If such wire
transfer of the Purchase Price does not occur as set forth in the proceeding
sentence, Buyer will be in breach of its material obligations under the
Agreement, and TXU will be entitled to all remedies available at law or in
equity.

     (b) The Preliminary Settlement Statement was prepared using a June 1, 2004
Effective Time. For purposes of the preparation of the Final Settlement
Statement and final settlement between the Parties, all calculations required
under Sections 2.10 (Revenues and Expenses); 2.11 (Adjustments to Purchase
Price) and 2.13 (Post-Closing Adjustments) of the Agreement will be made as if
the Closing had occurred as of 9:00 am on June 1, 2004 (it being recognized that
such time is being used for accounting purposes only).

     (c) In addition to the amounts on the Preliminary Settlement Statement,
Buyer will pay to TXU at Closing, by wire transfer of immediately available
funds, a sum that is equal to the interest on the Purchase Price for one day at
the rate of 5% per annum (this amount is $68,500).

     (d) With respect to the Transition Services Agreement (Software Related
Services), Transition Services Agreement (Engineering), Natural Gas
Transportation Agreement, Gas Storage Contract (Bethel) and Gas Storage Contract
(Bryson), the effective date is hereby amended to 11:01 PM Central Daylight Time
on June 1, 2004; provided, however, that for accounting purposes hereunder, each
agreement shall be determined as if such agreement were effective as of 9:00 AM
Central Daylight Time on June 1, 2004.

     Section 1.03. Further Agreements Between the Parties.

     (a) Subsequent to the execution of the Agreement, TXU determined that, in
order to provide for consistency with respect to severance benefits offered to
employees of TXU affiliates under certain circumstances, it would be necessary
to modify the severance benefits available to Transitioned Employees (as defined
in the Agreement), under paragraph 5.4(c)(v) of the Agreement. TXU agrees that,
upon notification from Buyer, including reasonable backup quantification, TXU
will pay, or reimburse Buyer, for the difference, if any, between severance
benefits actually paid by Buyer to a Transitioned Employee pursuant to paragraph
5.4(c)(v) and Schedule 5.4(c)(v), as amended by this Amendment, and the
severance benefits that would have

 

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been paid by Buyer to such Transitioned Employee pursuant to paragraph 5.4(c)(v)
but for this Amendment.

     (b) Additionally, the Parties have mutually identified certain employees of
TXU affiliates who will provide certain services to Buyer and to whom Buyer may
make offers of employment. These employees are identified in Schedule 8.10 to
the Transition Services and Access Agreement (Pipeline System Services)(as
amended) (the “Transition Agreement”) that is attached to this Amendment as
Exhibit B. The employees listed on Schedule 8.10 of the Transition Agreement (as
amended) will be considered to be Transitioned Employees (as defined in the
Agreement) for all purposes of the Agreement, including the employment terms
described in Section 5.4 of the Agreement as amended by this Amendment.

     Section 1.04. Entire Agreement. Except as herein expressly modified,
changed and amended, all of the terms, provisions, covenants and conditions in
the Agreement remain in full force and effect.

     Section 1.05. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document. It shall not be necessary
for Buyer and TXU to sign the same counterpart. Buyer or TXU may execute this
Agreement by signature transmitted via facsimile, to be followed by original
signatures delivered to the other party via overnight delivery service.

     IN WITNESS WHEREOF, TXU and Buyer have caused this Amendment to be
executed, as of the day and year first written.

                      TXU FUEL COMPANY     a Texas corporation
 
                    By:   -s- Kirk R. Oliver        

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    Name:   Kirk R. Oliver     Title:   Treasurer
 
                    ENERGY TRANSFER PARTNERS. L.P     a Delaware limited
partnership
 
                        By:   U.S. Propane, L.P.,             Its General
Partner
 
               

          By:   U.S. Propane, L.L.C.,

              Its General Partner
 
                        By:   -s- Kelcy Warren            

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        Name:   Kelcy Warren         Title:   CO - CEO