<PAGE>
                                                                    Exhibit 10.1

*** INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
    TREATMENT HAS BEEN REQUESTED, ALL SUCH MATERIAL HAS BEEN FILED WITH THE
    COMISSION PURSUANT TO RULE 24b OF THE SECURITIES EXCHANGE ACT OF 1934.

                                    AGREEMENT

      THIS AGREEMENT made and entered into this 14th day of Sep., 1999, by and
between BOSTON GAS COMPANY, a Massachusetts corporation, ESSEX GAS COMPANY, a
Massachusetts corporation and COLONIAL GAS COMPANY a Massachusetts corporation
hereinafter jointly referred to as "Buyer", and El Paso Energy Marketing
Company, a Delaware corporation, hereinafter referred to as "Seller"

                                WITNESSETH THAT:

      WHEREAS, Buyer desires to retain a manager for certain of its natural Gas
resource portfolio under the terms and conditions of this Agreement; and

      WHEREAS, Buyer desires to purchase natural Gas from Seller under the terms
and conditions of this Agreement; and

      WHEREAS, Seller desires to provide portfolio management services under the
terms and conditions of this Agreement; and

      WHEREAS, Seller desires to sell natural Gas to Buyer under the terms and
conditions of this Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants and benefits to
be derived hereunder, Buyer and Seller agree as follows;

                                    ARTICLE I
                                   DEFINITIONS

      Unless expressly stated otherwise, the following terms as used in this
Agreement shall mean:

1.1     The term "Algonquin" shall mean the Algonquin Gas Transmission Company.

1.2     The term "Btu" shall mean British Thermal Unit(s) which shall mean that
        amount of heat energy required to raise the temperature of one
        avoirdupois pound of water from fifty-nine-degrees Fahrenheit to
        sixty-degrees Fahrenheit at standard atmospheric pressure, as determined
        on a dry basis. All prices and charges paid hereunder shall be computed
        on a "dry" Btu basis.

1.3     The term "Buyer's Unbundling Program" shall mean the methodology by
        which Buyer, each Month, implements the mandatory assignment of a
        pro-rata share Of its pipeline and underground storage resources and
        certain Gas supplies to third party suppliers on behalf of existing
        transportation customers and customers converting from sales to
        transportation service.

1.4     The term "Canadian Index" shall mean a transfer price from Buyer to
        Seller of $0.00 per MMBtu with title transfer of the Gas occurring at
        the respective receipt points into Tennessee Gas Pipeline and Iroquois
        Gas Transmission for those volumes reflected in Appendix 1 and
        identified as Canadian Supply under the heading Gas Commodity Contract
        Volumes. Both Buyer and Seller understand that these volumes are subject
        to change each Month during the Term of this Agreement as a direct
        result of Buyer's Unbundling Program.

1.5     The term "Day" shall mean the period of time beginning at 9:00 a.m.,
        Central Clock Time, on a calendar day and ending at 9.00 a.m., Central
        Clock Time, on the following calendar day.

1.6     The term "Delivery Points" shall mean those city gate meter stations
        connected to the Tennessee Gas Pipeline and Algonquin Gas Transmission
        system as listed in Appendix 1.

1.7     The term "DTE". shall mean the Massachusetts Department of
        Telecommunications and Energy.

1.8     The term "Ending Underground Storage Balance" means the quantity of Gas
        that is physically in Buyer's total underground storage accounts as of
        October 31, 2002.

1.9     The term "Enron Index" shall mean those volumes identified in Appendix 1
        as Enron Supply. Both Buyer and Seller understand' that these volumes
        are subject to change each Month during the Term of this Agreement as a
        direct result of Buyer's Unbundling Program. From time to time, Seller
        shall be required to take title. to the Enron Supply at a $0.00 per
        MMBtu transfer price at the interconnection between Tennessee and
        Algonquin at Mendon, MA and redeliver like volumes, less applicable
        transport fuel, to Boston Gas' Delivery Point(s) off of Algonquin. Upon
        start up of the Sable Offshore Energy Project, ("SOEP") all or a portion
        of the volumes identified as Enron Supply may be replaced, at Buyer's
        option, with supplies delivered from Imperial Oil via Maritimes and
        Northeast Pipeline and Tennessee to the Delivery Points. All Imperial
        Oil volumes, not to exceed 43,200 MMBtu/Day, will be nominated,
        scheduled and paid for by Buyer. Subsequent to the start up of SOEP, the
        parties understand and agree that this index may include both the Enron
        Supply and Imperial Oil volumes of up to 43,200 MMBtu/Day for a period
        of up to ninety Days at Buyers discretion.

1.10    The term "FERC" shall mean the Federal Energy Regulatory Commission.

1.11    The term "Force Majeure" shall mean an event as defined in section 11.3
        of this Agreement.

1.12    The term "Gas" shall mean quality Gas as defined in the FERC Gas Tariffs
        of Texas Eastern Transmission, Texas Gas Transmission, Tennessee Gas
        Pipeline, Transcontinental Pipeline, CNG Transmission, National Fuel Gas
        Supply, Iroquois Gas Transmission, Honeoye Storage Company, Algonquin
        Gas Transmission and Maritimes and Northeast Pipeline L,L.C.

1.13    The term "Gas Commodity Contract Volumes" means Buyer's Gas supply
        contract volumes as identified on Appendix 1.

1.14    The term "Initial Underground Storage Balance" shall mean that quantity
        of Gas that is physically in Buyer's total underground storage accounts
        as of November 1, 1999.

1.15    The term "MMBtu" shall mean one million (1,000,000) Btus.

1.16    The term "Month" shall mean the period of time beginning on the first
        Day of each calendar month and ending on the first Day of the following
        calendar month.

1.17    The term "NYMEX" shall mean the New York Mercantile Exchange for Natural
        Gas Futures Contracts.

1.18    The term "Off-Peak Period" shall mean the period of time beginning on
        the first Day of May and ending on the last Day of October.

1.19    The term "Off-Peak Period Baseload Index" shall mean the weighted
        average Gas price as reflected in Inside FERC First of the Month's
        Pricing Report for Tennessee zone 0 and zone 1 and for the Tetco STX,
        WLA ELA, and ETX supply areas, associated with Buyer's long haul
        transportation contracts listed in Appendix 1 and not allocated to the
        Canadian Index, Enron Index or Sonat Index.

1.20    The term "Off-Peak Period Swing Index" shall mean the weighted average
        Gas price as reflected in Pasha's Gas Daily Pricing Report for Tennessee
        zone 0 and zone 1 and for the Tetco STX, WLA, ELA, and ETX supply areas
        associated with Buyer's long haul transportation contracts listed in
        Appendix 1 and not allocated to the Canadian Index, Enron Index or Sonat
        Index.

1.21    The term "Peak Period" shall mean the period of time beginning on the
        first Day of November and ending on the last Day of April.

1.22    The term "Peak Period Baseload Index " shall mean the weighted average
        Gas price as reflected in Inside FERC First of the Month's Pricing
        Report for Gas Delivered to Pipelines for the applicable Month for the
        applicable supply area capacity associated with the transportation
        contracts listed in Appendix I not allocated to the Canadian Index,
        Enron Index or Sonat Index.

1.23    The term "Peak Period Swing Index" shall mean the weighted average Gas
        price as reflected in Pasha's Gas Daily Pricing Report for the
        applicable supply capacity associated with the transportation contracts
        listed in Appendix 1 not allocated to the Canadian Index, Enron Index,
        or Sonat Index.

1.24    The term "Sonat Index" shall mean those volumes identified in Appendix 1
        as Sonat Supply and shall have a $0.00 per MMBtu transfer price plus
        applicable Variable Charges to the Delivery Points with title transfer
        occurring at the Sonat and Buyer's supply aggregation agreement on
        Tennessee's zone 0, 100 leg and zone 1, 500 leg, The Sonat Index will be
        eliminated for purposes of the pricing hierarchy set forth in Article
        III below effective April 1, 2000.

1.25    The term "Storage WACOG" shall mean the Buyer's weighted average cost of
        all underground storage Gas.

1.26    The term "Tennessee" shall mean the Tennessee Gas Pipeline Company.

1.27    The term "Term" shall mean the period commencing on November 1, 1999 and
        ending on October 31, 2002.

1.28    The term "Transporters" shall mean any of the following, Texas Eastern
        Transmission, Texas Gas Transmission, Tennessee Gas Pipeline,
        Transcontinental Gas Pipeline, CNG Transmission, National Fuel Gas
        Supply, Iroquois Gas Transmission, Honeoye Storage Company, Algonquin
        Gas Transmission Company and Maritimes and Northeast Pipeline L.L.C.

1.29    The term "Variable Charges" shall mean all applicable Transporter
        transportation commodity and fuel charges and all Transporter storage
        injection, withdrawal and fuel charges and any other surcharges
        associated with delivery of Buyer's Gas to the Delivery Points, based
        upon the pricing hierarchy as reflected in Section 3.1.

                                   ARTICLE-II
                            QUANTITY AND NOMINATIONS

2.1     Nominated Quantity . Subject to the terms and conditions of this
        Agreement, Buyer will nominate, purchase and receive and Seller will
        sell and deliver on a firm basis on each Day of the Term hereof, a
        quantity of Gas up to the MDQ as defined in section 2.2 below.

2.2     Maximum Daily Quantity ("MDQ"). Notwithstanding anything to the contrary
        herein, the MDQ of Gas that Buyer is entitled to purchase and receive
        and that Seller is obligated to sell and deliver on each Day of the Term
        hereof, shall be as follows: for the period November 16 through April 15
        the MDQ is 536,011 MMBtu, for the period April 16, through May 31, the
        MDQ is 517,038 MMBtu, for the period June 1 through September 30, the
        MDQ is 466,438 MMBtu, for the period October 1 through November 14 the
        MDQ is 517,038, and for the Day of November 15, the MDQ is 507,689. Both
        Buyer and Seller understand that the MDQ shall be adjusted Monthly and
        or Daily to reflect certain instances including, but not limited to,
        application of underground storage withdrawal ratchets, Buyer's
        Unbundling Program and Transporters' restrictions affecting secondary
        firm capacity.

2.2.1   Quantities in Excess of the MDQ. From time to time during the term of
        this Agreement, Seller may sell and Buyer may purchase quantities in
        excess of the MDQ. The price and terms of such excess sales will be
        mutually agreed upon by Seller and Buyer prior to delivery. Provided
        however, that nothing contained in this section 2.2.1 shall prevent
        Buyer from purchasing quantities of Gas in excess of the MDQ from a
        third party(s) other than Seller.

2.3     Nomination and Delivery Requirements.

2.3.1   Monthly Nomination. On or before 12:00 Noon Central Time and three
        business Days prior to the first Day of the following Month, Buyer will
        provide Seller with a nomination specifying the total daily quantity of
        Gas to be purchased and received under this Agreement for each Day
        during the following Month, ("Daily Nominated Quantity"). Such
        nomination by Buyer shall include the volumes indicated as Peak Period
        Index Baseload or Off-Peak Period Baseload Index volumes pursuant to
        section 3.1.1 below.

2.3.2   Daily Adjustments. On or before the applicable Transporters nominations
        deadlines for the next Day, Buyer may adjust its Daily Nominated
        Quantity prospectively for any Day during the remainder of that Month.

2.3.3   Intra-Day Adjustments. On or before the applicable intra-Day
        Transporters nomination deadline, Buyer may adjust its Daily Nominated
        Quantity for the remainder of that Day. In the event that Buyer requests
        an intra-Day adjustment, the Parties shall work together to utilize the
        intra-Day flexibility associated with the contracts listed in Appendix I
        in making such adjustments.

2.3.4   Manner of Submitting Nominations. Buyer may provide the nominations set
        forth above in this section either orally or by fax, but any oral
        nomination must be followed by written confirmation within twenty-four
        (24) hours. By 3:30 P.M. Eastern time each Day, Seller shall provide
        volume allocations by contract and delivery point consistent with
        Buyer's nominations for the following Day.

2.3.5   Points of Delivery. Seller will deliver volumes of Gas nominated by
        Buyer to points designated by Buyer as provided by the applicable
        contracts or such other points as the parties may mutually agree.

2.4     Remedies for Failure to Deliver.

2.4.1   Seller's Failure to Deliver. Except for an event of Force Majeure, if
        Seller fails to deliver to Buyer the Daily Nominated Quantity, and such
        failure to deliver is not excused under this Agreement, then Seller
        shall reimburse Buyer an amount, if positive, between the price Buyer
        pays for a delivered substitute supply of Gas and the Commodity Price,
        multiplied by the quantity of Gas Seller fails to deliver in accordance
        with this section, plus $ *** per MMBtu, multiplied by the quantity of
        Gas Seller fails to deliver. Buyer agrees to act in good faith in
        purchasing such substitute supplies of Gas so as to minimize Seller's
        reimbursement costs hereunder. In the event Seller fails to deliver for
        any continuous period in excess of one (1) Day, Buyer may terminate this
        Agreement in accordance with the provisions of section 5.2 below.

2.4.2   Liquidating Damages. Should Seller's failure to deliver occur on a Day
        Buyer is unable, utilizing reasonable efforts, to obtain a delivered
        substitute supply, then in addition to any amounts owed by Seller to
        Buyer pursuant to Section 2.4.1, Seller shall pay to Buyer $ *** per
        MMBtu multiplied by the quantity Seller fails to deliver. Such amount
        represents Buyer's damages difficult to quantify and constitute
        liquidated damages and not a penalty.

2.4.3   Sole and Exclusive Remedy. The remedies set forth in Sections 2.4.1 and
        2.4.2 shall be Buyer's sole and exclusive remedy for Seller's failure to
        deliver Gas hereunder.

2.4.4   Corporate Guaranty. Seller shall cause its parent corporation, which
        shall have total stockholders' equity of at least $200,000,000, to
        execute and maintain in effect throughout the term of this Agreement a
        valid and binding guaranty of Seller's obligations under this Agreement
        to Buyer substantially in the form attached hereto as Appendix 2, or
        provide such other form of guaranty as may be acceptable to Buyer in its
        sole discretion.

                                  ARTICLE III
                                     PRICE

3.1     Commodity Price.

3.1.1   Quantities Within MDQ. The price for Gas delivered hereunder up to the
        MDQ will be referred to as the "Commodity Price" and shall be equal to
        the following pricing hierarchy:

CANADIAN INDEX:   0 up to the sum total of Buyer's entitlements on the
                  Canadian contracts identified in Appendix 1 stated in MMBtu's
                  per Day shall be equal to the Canadian Index plus applicable
                  Variable Charges.

ENRON INDEX:      The next quantities., as specified below, shall be equal to
                  the Enron Index plus applicable Variable Charges, Provided
                  however, the maximum volumes to be priced at the Enron Index
                  shall be adjusted each Month in accordance with the Buyer's
                  Unbundling Program.

                  (a) prior to the start up of the Sable Offshore Energy
                      Project, 35,000 MMBtu/Day;

                  (b) for the first 90 Days after the start up of the Sable
                      Offshore Energy Project, quantities selected by Buyer at
                      its discretion but not less than 35,000 MMBtu/Day (except
                      that Buyer may select a volume less than 35,000 MMBtu/Day
                      consistent with adjustments made to the Enron Supply as a
                      result of Buyer's Unbundling Program) nor more than 78,200
                      MMBtu/Day;

                  (c) More than 90 Days after the start up of the Sable Offshore
                      Energy Project, 43,200 MMBtu/Day.

SONAT INDEX:      The next 17,300 MMBtu's per Day shall be equal to the Sonat
                  Index plus applicable Variable Charges. The Sonat Index will
                  terminate effective April 1, 2000.

PEAK PERIOD
BASELOAD INDEX:   In the Peak Period the next volumes, up to the amount
                  indicated by Buyer in accordance with this section, but not to
                  exceed Buyer's MDQ less the Storage WACOG tier, less the
                  Canadian Index tier, less the Enron Index tier and less the
                  Sonat Index tier, shall be equal to the Peak Period Baseload
                  Index plus applicable Variable Charges. On or before the 25th
                  Day of each Month, Buyer will indicate the volumes that will
                  be subject to the Peak Period Baseload Index for the following
                  Month. If Buyer fails to take delivery of volumes it indicates
                  as Peak Period Baseload index volumes, and such failure to
                  take is not excused under the Agreement, then, Buyer shall
                  reimburse Seller the amount, if any, by which the price Seller
                  is able to obtain by reselling volumes not taken is exceeded
                  by the Peak Period Baseload Index. Seller shall act in good
                  faith to resell such volumes in a commercially reasonable
                  manner so as to minimize Buyer's reimbursement costs
                  hereunder.

PEAK PERIOD
SWING INDEX:      In the Peak Period the next volumes, up to Buyer's MDQ less
                  the Storage WACOG tier, less the Canadian Index tier, less the
                  Enron Index tier, less the Sonat Index tier and the less the
                  Peak Period Baseload Index tier shall be equal to the Peak
                  Period Swing Index plus applicable Variable Charges.

OFF-PEAK PERIOD
BASELOAD INDEX:   In the Off-Peak Period the next volumes, up to the amount
                  indicated by Buyer pursuant to this section, but not to exceed
                  Buyer's MDQ less the Storage WACOG tier, less the Canadian
                  Index tier, less the Enron Index tier and less the Sonat Index
                  tier, shall be equal to the Off-Peak Period Baseload Index
                  plus applicable Variable Charges. On or before the 25 th Day
                  of each Month, Buyer will indicate the volumes that will be
                  subject to the Off-Peak Period Baseload Index for the
                  following Month. If Buyer fails to take delivery of volumes it
                  indicates as Off-Peak Period Baseload Index volumes, and such
                  failure to take is not excused under the Agreement, then,
                  Buyer shall reimburse Seller the amount, if any, by which the
                  price Seller is able to obtain by reselling volumes not taken
                  is exceeded by the Off-Peak Period Baseload Index. Seller
                  shall act in good faith to resell such volumes in a
                  commercially reasonable manner so as to minimize Buyer's
                  reimbursement costs hereunder.

OFF-PEAK PERIOD
SWING INDEX:      In the Off-Peak Period the next volumes up to Buyer's MDQ less
                  the Storage WACOG tier, less the Canadian Index tier, less the
                  Enron Index tier, less the Sonat Index tier and less the
                  Off-Peak Period Baseload Index tier shall be equal to the
                  Off-Peak Period Swing Index plus applicable Variable Charges.

STORAGE WACOG:    All remaining volumes, up to Buyer's MDQ, shall be equal to
                  the Storage WACOG plus applicable Variable Charges.

3.1.2   Buyer's Right to Fixed Pricing. Buyer shall retain the right to convert
        any Baseload Volume Index price to a fixed price for any portion of the
        MDQ for any Month(s) during the Term of this Agreement, provided any
        converted volumes are specifically within the following Commodity Price
        tiers: Sonat Index, Peak Period Baseload Index, Peak Period Swing Index,
        Off-Peak Period Baseload Index or Off-Peak Period Swing index. Such
        fixed pricing shall be defined as the applicable NYMEX based price plus
        a mutually agreed upon basis differential, Buyer must notify Seller of
        any change to fixed pricing for any Month on or before three (3) full
        business Days prior the last Day of trading for the applicable NYMEX
        future contract Month(s). In addition, if Buyer elects to convert to a
        fixed price for any of its MDQ, then Buyer will be required to purchase
        on each Day during the applicable converted period 100 percent of the
        volume that Buyer elected to convert to a fixed price.

3.2     Guaranteed Payment. Buyer agrees to invoice Seller on or before the 15th
        Day of each Month during the Term and Seller agrees to pay Buyer an
        amount of $ *** , payable in thirty six (36) equal installments of $ ***
        on or before the 25th Day of each Month during the Term of this
        Agreement to compensate Buyer for the use of Buyer's portfolio. Such
        payments shall be made by wire transfer at such location as Buyer may
        from time to time designate in writing.

3.3     Transportation and Underground Storage Cost Reimbursement. Buyer shall
        reimburse Seller for 100 percent of the transportation and underground
        storage reservation charges associated with capacities assigned from
        Buyer to Seller pursuant to Article IV during the Term of this
        Agreement. In addition, Buyer shall reimburse Seller for 100 percent of
        the applicable transportation and underground storage Variable Charges
        associated With the delivery of Gas by Seller to Buyer's Delivery Points
        up to the MDQ and based upon the pricing hierarchy as reflected in
        section 3.11. All Transporter refunds and credits applicable to the Term
        of this Agreement associated with capacities assigned from Buyer to
        Seller during the Term of this Agreement shall belong to Buyer.

3.4     Underground Storage Refill.

                                      ***

3.5     Suspension of Indices, If, during the Term of this Agreement, a
        specified index as defined in sections 1.19, 1.20, 1.22 and 1.23 ceases
        to be published or is not published for a given Month, or, if a more
        appropriate index becomes available then Buyer and Seller shall mutually
        agree upon a replacement index.

                                   ARTICLE IV

               TRANSPORTATION AND UNDERGROUND STORAGE ASSIGNMENTS

4.1     Assignment of Transportation and Under-ground Storage Contracts to
        Seller. Each Month, Buyer shall assign or otherwise provide agency
        rights to the specified transportation and underground storage contracts
        and related quantities as listed in Appendix 1, as attached hereto. Such
        quantities are subject to recall and will be adjusted each Month in
        accordance with Buyer's Unbundling Program requirements. Subject to
        Article 11 of this Agreement and the limitations set forth in section
        4.2.4 below, Seller shall have full and complete control over the
        utilization of the contracts and related quantities listed in Appendix
        1, including without limitation the manner and timing of any
        transportation, injections, and withdrawals of Gas under such contracts,
        provided that Seller shall maintain maximum withdrawal rights on each of
        the Tennessee FS-MA contract numbers 527, 524 and 2272 at all times
        throughout the term of this Agreement and further that Seller shall not
        release any Tennessee capacity on contracts 2062, 2025, and 435 upstream
        of Zone 4 at any time during the Months of December, January and
        February Any incremental charges incurred by either Buyer or Seller as a
        result of such utilization by Seller shall be the sole responsibility of
        Seller, and Seller shall either pay or credit Buyer for any such charges
        incurred by Buyer. All assignments or agency rights from Buyer to Seller
        shall be in accordance with all the applicable Transporters' tariff
        provisions and shall terminate upon the expiration of this Agreement.

4.1.1   Transfer of Gas in Underground Storage. The Initial Underground Storage
        Balance shall be under the control and discretion of Seller effective
        with the Term of this Agreement and title to such Initial Underground
        Storage Balance shall transfer to Seller as of the effective date of
        this Agreement at no cost to Seller. No resale agreement or other
        indicia of the transfer other than this Agreement shall be necessary to
        evidence such transfer of title. Buyer warrants title to the Initial
        Underground Storage Balance and that such Gas is free from liens and
        adverse claims of every kind. Buyer will indemnify and save Seller
        harmless against all loss, damage and expense of every character on
        account of adverse claims to the Initial Underground Storage Balance
        prior to transfer of title to Seller. Seller shall ensure that all
        tariff provisions and other compliance requirements of underground
        storage vendors applicable to Gas in underground storage are met and
        penalties are avoided. Any penalties incurred by Buyer or Seller as a
        result of Seller's utilization of Gas in underground storage shall be
        the sole responsibility of Seller. Prior to April 1st of each year,
        Seller and Buyer will agree on underground storage refill volumes to be'
        injected into underground storage over the following seven Month period,
        such volumes to be priced in accordance with section 3.4 above. Unless
        otherwise agreed to in writing prior to March 15, 2002, at the end of
        this Agreement, Seller shall cause Buyers underground storage to be 95
        percent full and return control, discretion and title of such Gas in
        underground storage to Buyer. Buyer and Seller agree to work together in
        complying with all contract termination provisions, including but not
        limited to the two (2) underground storage contracts that Buyer is
        holder of on National Fuel Gas Supply.

4.1.2   Gas Commodity Contract Volumes. For those Gas Commodity Contract Volumes
        identified in Appendix 1, Buyer will transfer and Seller will accept
        title to such volumes at the delivery point(s) applicable to each such
        Gas Commodity Contract Volumes. All volumes delivered will be adjusted
        Monthly in accordance with Buyer's Unbundling Program requirements.

4.2     Responsibility for Transportation and Underground Storage Contracts.

4.2.1   Responsibility for Administration. Subject to the limitations in section
        4.2.4 below, Seller shall assume all obligations and rights under the
        transportation and underground storage contracts listed in Appendix 1,
        including without limitation, the obligation to submit nominations to
        all applicable Transporters and to pay all Transporter invoices.

4.2.2   Operational Balancing Agreements. Buyer shall retain all
        responsibilities for confirming all of Sellers daily deliveries to
        Buyer's city gates covered under Buyers Operational Balancing Agreements
        (OBA) for both Tennessee and Algonquin. As such, any imbalances caused
        by Seller over or under delivering Buyer's Daily Nominated Quantities
        shall be the physical and financial responsibility of Seller. Any
        imbalances caused by Buyer physically taking greater or less than Buyers
        Daily Nominated Quantities shall be the physical and financial
        responsibility of Buyer.

4.2.3   Projected Requirements. Buyer shall periodically provide Seller
        information concerning Buyer's expected Gas requirements on its
        distribution system. Buyer will also provide Seller information
        concerning any known or expected events that will cause material changes
        in Buyers daily Gas requirements as soon as the information becomes
        known to Buyer. Buyer and Seller agree to work together on a daily basis
        to ensure that nominations (including any necessary adjustments thereto)
        are made timely on all applicable Transporters and such nominations
        reflect, as much as reasonably possible, Buyer's expected requirements.

4.2.4   Modification of Contracts. Seller will fully comply with all terms and
        conditions of the contracts listed in Appendix 1. Seller shall not
        amend, extend or cause the early termination of any transportation,
        underground storage or Gas Commodity Contract of Buyer which is subject
        to this Agreement without the prior consent of Buyer. In the event such
        consent is provided orally it shall be followed up in writing by Buyer
        within 24 hours.

                                   ARTICLE V
                               TERM OF AGREEMENT

5.1     Primary Term. This Agreement shall become effective on November 1, 1999
        and shall remain in full force and effect through October 31, 2002,

5.2     Early Termination. If either Party commits and has been notified in
        writing of a material breach of any provision of this Agreement not
        excused by a Force Majeure event, and fails to cure such breach within
        twenty four hours of such written notice, this Agreement may be
        immediately terminated by the non-breaching party.

5.3     Winding Up. At the end of the primary term or any other termination of
        this Agreement, Seller shall immediately assign back to Buyer all of
        Buyer's right, title and interest in the contracts listed on Appendix I
        free and clear of all claims, liens, encumbrances, restrictions and
        defects in title of any nature incurred as a result of Seller's acts or
        omissions.

                                   ARTICLE VI
                                TITLE AND TAXES

6.1     Transfer of Title, Possession and Control. Title to the Gas sold
        hereunder shall pass from Seller to Buyer upon delivery of said Gas to
        the Delivery Points as reflected in Appendix 1. As between the Parties
        hereto, Seller shall be deemed to be in control and possession of all
        Gas delivered hereunder and shall indemnify and hold Buyer harmless from
        any damage, injury or losses which occur prior to the delivery to Buyer
        at the Delivery Points; otherwise, Buyer shall be deemed to be in
        exclusive control and possession thereafter and shall indemnify and hold
        Seller harmless from any other injury, damage or losses.

6.2     Warranty of Title. Except as set forth below, Seller warrants title to
        all Gas delivered hereunder by Seller, including the Ending Underground
        Storage Balance or that Seller has the right to sell the same, and that
        such Gas is free from liens and adverse claims of every kind. Seller
        will indemnify and save Buyer harmless against all loss, damage and
        expense of every character on account of adverse claims to the Gas
        delivered by it before delivery to Buyer.

6.3     Taxes. Other than ad valorem taxes on underground storage Gas which are
        subject to section 6.4 below, Buyer shall reimburse Seller for any
        taxes, fees or charges other than an income tax, which are levied by a
        governmental or regulatory body on the Gas sold under this Agreement.

6.4     Ad Valorem Taxes. If any underground storage Gas is subject to ad
        valorem property taxes during the term of this Agreement, Buyer shall be
        responsible for payment of such taxes regardless of whether title to
        such underground storage Gas is held by Buyer or Seller except if Seller
        injects Gas into underground storage for its own account or withdraws
        Gas from underground storage for purposes other than meeting the city
        gate requirements of Buyer, then Seller shall be responsible for payment
        of all applicable ad valorem taxes on the amounts so injected or
        withdrawn.

                                  ARTICLE VII
                              QUALITY AND PRESSURE

7.1     Pressure Requirements. All Gas delivered at the Delivery Points shall be
        at the pressure existing in Tennessee and Algonquin's facilities.
        Neither Seller nor Buyer shall be obligated to install or operate
        compression facilities.

                                  ARTICLE VIII
                             MEASUREMENT AND TESTS

8.1     Measurement Point. All Gas sold hereunder shall be measured at the
        Delivery Points on Tennessee and Algonquin systems at pressures in
        existence at the time of delivery and shall be measured to the unit of
        one MMBtu.

8.2     Standards for Measurement and Tests. Unless specified herein to the
        contrary, the standards for measurement and tests shall be governed by
        those standards set forth in the currently effective Tennessee and
        Algonquin tariffs.

                                   ARTICLE IX
                              BILLING AND PAYMENT

9.1     Billing and Payment. Seller shall render to Buyer, at the address
        indicated in Section 12.2 hereof, on or before the third business Day of
        each Month an estimate of all Gas volumes purchased during the preceding
        Month and on or before the fifteenth (15th) Day of each calendar Month
        an invoice for all Gas purchased during the preceding Month, according
        to the measurements, computations, and prices provided herein. Invoices
        may be based initially upon estimates, but will be corrected to actual
        as soon as possible. Buyer agrees to make payment hereunder to Seller
        for its account in available funds by wire transfer or by mail at such
        location as Seller may from time to time designate in writing. Payment
        shall be made by Buyer within ten (10) Days of the date of receipt of
        Sellers invoice. Notwithstanding the above, if a good faith dispute
        arises between the Parties over the amounts due under the invoice for
        any matters, other then any reimbursement for the demand or reservation
        charges under the firm transportation and underground storage contracts,
        then Buyer will pay that portion of the invoice(s) not in. dispute on or
        before the due date and both Parties will continue to perform their
        obligations under this Agreement during such dispute.

9.2     Review of Books and Records. For a period of two years after the date of
        final billing for the last Month in the Term of this Agreement, Buyer
        and Seller shall have the right to inspect and examine, at reasonable
        hours, the books, records and charts of the other pertaining to any term
        or condition of this Agreement to the extent necessary to verify the
        accuracy of any invoice, charge or computation made pursuant to this
        Agreement.

                                    ARTICLE X
                                REGULATORY BODIES

10.1    Laws and Regulations. This Agreement shall be subject to review and
        approval by the DTE. In the event such approval is not obtained on or
        before October 15 1999 in a form acceptable to Buyer, then this
        Agreement shall be null and void and the services contemplated hereunder
        shall not commence. This Agreement shall also be subject to all valid
        applicable governmental laws and orders, including but not limited to
        the FERC and DTE, regulatory authorizations directives, rules and
        regulations of any governmental body or official having jurisdiction
        over the Parties, their facilities, the Gas or this Agreement or any
        provision thereof, but nothing contained herein shall be construed as a
        waiver of any right to question or contest any such law, order, rule or
        regulation in any forum having jurisdiction.

10.2    Applicable Law. This Contract shall be construed in accordance with the
        laws of the Commonwealth of Massachusetts, excluding any conflict of
        laws and principles of said jurisdiction that might require the
        application of the laws of another jurisdiction.

10.3    Changes in Law or Regulation. If any federal or state statute or
        regulation or order by a court of law or regulatory authority directly
        or indirectly (i) prohibits performance under this Agreement, (ii) makes
        such performance illegal or impossible, or (iii) effects a change in a
        substantive provision of this Agreement which has a significant material
        adverse impact upon the ability of either Party to perform its
        obligations under this Agreement, then the Parties will use all
        reasonable efforts to revise the Agreement so that:

        (a)  performance under the Agreement is no longer prohibited, illegal,
             impossible or is no longer impacted in a material adverse fashion,
             and

        (b)  the Agreement is revised in a manner that preserves, to the
             maximum extent possible, the respective positions of the Parties.

        Each Party will provide reasonable and prompt notice to the other Party
        as to any proposed law, regulations or any regulatory proceedings or
        actions that could affect the rights and obligations of the Parties. If
        the Parties are unable to revise the Agreement in accordance with the
        above, then the Party whose performance is rendered prohibited, illegal,
        impossible or is impacted in a material adverse manner shall have the
        right, at its sole discretion, to suspend this Agreement upon written
        notice to the other Party. Either Party may then terminate this
        Agreement upon 30 Days written notice to the other Party.

                                   ARTICLE XI
                                 FORCE MAJEURE

11.1    Suspension of Receipt and Delivery obligations. If Buyer or Seller is
        rendered unable, wholly or in part, by Force Majeure to perform
        obligations under this Agreement, other than the obligation to make
        payments due under this Agreement, it is agreed that the performance of
        the respective obligations of Seller and Buyer to deliver or purchase
        and receive Gas, so far as they are affected by Force Majeure, shall be
        excused and suspended from the inception of any such inability until it
        is corrected, but for no longer period. Buyer or Seller, whichever is
        claiming such inability, shall give notice thereof to the other as soon
        as practicable after the occurrence of the Force Majeure, Such notice
        may be given orally or in writing but, if given orally, it shall be
        promptly confirmed in writing, giving reasonably full particulars. Such
        inability shall be promptly corrected to the extent it may be corrected
        through the exercise of reasonable diligence by the Party claiming
        inability by reason of Force Majeure.

11.2    Liability During Force Majeure. Neither Buyer nor Seller shall be liable
        to the other for any losses or damages, regardless of the nature thereof
        and however occurring, whether such losses or damages be direct or
        indirect, immediate or remote, by reason of, caused by, arising out of
        or in any way attributable to suspension of the performance of any
        obligation of either Party to the extent that such suspension occurs
        because a Party is rendered unable, wholly or in part, by Force Majeure
        to perform its obligations.

11.3    Force Majeure. The term Force Majeure means an event: (i) that was not
        within the control of the Party claiming its occurrence; (ii) that could
        not have been prevented or avoided by such Party through the exercise of
        due diligence; and (iii) that prohibits or prevents such Party from
        performing its obligations under this Agreement. Events that may give
        rise to a claim of Force Majeure include:

11.3.1  Acts of God. The term acts of God, including earthquakes, epidemics,
        fires, floods, landslides, lightning, storms, washouts, weather related
        events such as hurricanes or freezing or failure of wells or lines of
        pipe used to supply the Gas described in this Agreement which prevents
        delivery to the delivery points, and other similar, unusual and severe
        natural calamities.

11.3.2  Acts of the public enemy, wars, blockage, insurrections, riots. civil
        disturbances and arrests.

11.3.3  Strikes, lockouts or other industrial disturbances.

11.3.4  Explosions, breakage, accidents to equipment, facilities or lines of
        pipe used to supply the Gas under this Agreement or explosions,
        breakage, accidents to equipment, facilities or lines of pipe used to
        enable Buyer to receive Gas under this Agreement, including without
        limitation to equipment, facilities or lines of pipe related to Buyers
        liquefied natural gas facilities.

11.3.5  The temporary inability of Transporters to receive, transport or deliver
        the Gas described in this Agreement; or

11.3.6  Any other cause of a similar type, provided that such cause satisfies
        each of the three conditions referenced in Section 11.3 hereof (i.e.
        "(i)-(iii)"

11.4    Termination. If a Force Majeure event continues for a period of two (2)
        Days, and the parties, working together in good faith, have been unable
        to resolve such Force Majuere event, then the Party which did not claim
        such Force Majeure may at any time thereafter terminate this Agreement
        upon forty eight (48) hours prior written notice to the extent the Force
        Majeure event has not been corrected prior to the expiration of such
        notice period.

                                  ARTICLE XII
                                 MISCELLANEOUS

12.1    Confidentiality. Except as otherwise provided herein, Seller and Buyer
        agree to maintain the confidentiality of the price provisions of this
        Agreement and Seller and Buyer agree not to divulge same to any third
        Party except to the extent, and only to the extent, required by law,
        court order or the order or regulation of an administrative agency
        having jurisdiction over Buyer and Seller, or the subject matter of this
        Agreement. If required to be disclosed, then the Party subject to the
        disclosure requirement shall (a) notify the other Party immediately, and
        (b) cooperate to the fullest extent in seeking whatever confidential
        status may be available to protect any material so disclosed.

12.2    Notices. Except as otherwise expressly provided in this Agreement, every
        notice, request, statements and invoices provided in this Agreement
        shall be in writing and directed to the Party to whom given, made or
        delivered at such Party's address as follows:

        Buyer:      Boston Gas Company
                    One Beacon Street
                    Boston, MA 02108
                    Attention: Elizabeth C. Danehy
                    Director of Gas Acquisition & Transportation Services
                    Telephone: 617-723-5512 ext. 2225
                    Fax: 617-367-6463

                    For Payments:
                    Boston Gas Company
                    Fleet Bank of Massachusetts
                    Account # 02-0000-4039-00101
                    ABA # 011-500-101

        Seller:     El Paso Energy Marketing Company
                    1001 Louisiana Street
                    Houston, TX 77002
                    Attention: Russell A. Mahan

                    For Payments:
                    El Paso Energy Marketing Company
                    Mellon Bank
                    Account # 043000261
                    ABA # 0209517

        Either Buyer or Seller may change one or more of its addresses for
        receiving invoices, statements, notices and payments by notifying the
        other in writing.

12.3    Headings. The Table of Contents and the headings of any article, section
        or subsection of this Agreement are for purposes of convenience only and
        shall not be interpreted as having meaning or effect.

12.4    Waiver of Default. No waiver by either Party of one or more defaults or
        breaches by the other in performance of any of the terms or provisions
        of this Agreement shall operate or be construed as a waiver of any
        future default or breach, whether of a like or of a different character.

12.5    Entire Agreement. The terms and conditions contained herein constitute
        the full and complete agreement between the Parties and any change to be
        made must be submitted in writing and agreed to by both Parties,

12.6    Enforceability. This Agreement shall inure to the benefit of and be
        binding upon the parties and their respective heirs, successors and
        assigns. Each Party represents that it has all necessary power and
        authority to enter into and perform its obligations under this Agreement
        and that this Agreement constitutes a legal, valid and binding
        obligation of that Party enforceable against it in accordance with its
        terms, except as such enforceability may be affected by any bankruptcy
        law or the application of principles of equity.

12.7    Assignment and Organizational Changes. Seller shall not assign its
        rights or obligations under this Agreement without the express written
        consent of Buyer. In the event of a Change of Control of Seller
        occurring during the term of this Agreement, Buyer shall have the right
        to terminate this Agreement upon thirty (30) Days written notice to
        Seller. For purposes of this section, 12.7 "Change of Control" means the
        occurrence of any one or more of the following events: (a) the
        shareholders of Seller approve a merger or consolidation of Seller with
        any other entity, (b) the shareholders of Seller approve a plan of
        liquidation of Seller or an agreement for the sale or disposition by
        Seller of all or substantially all of its assets, or (c) if a majority
        of the key individuals at Seller, who at the beginning of this Agreement
        are providing the services for Buyer under this Agreement are no
        longer employed by Seller.

12.8    Y2K Compliance. Seller expressly warrants and represents that all
        computer hardware or software used in Seller's performance of this
        Agreement are and will continue to be year 2000 compliant. For purposes
        of this section 12.8, the term "year 2000 compliant" means that date
        data outside of the range of 1900-1999 will be correctly processed in
        any level of computer hardware or software including but not limited to,
        microcode, firmware, application programs, files and data bases. In no
        event shall any Y2K related failure of any computer hardware or software
        relied upon by Seller in the performance of this Agreement be deemed a
        Force Majeure event.

12.9    GISB Compliance. Seller warrants and represents that all computer
        hardware or software used in Seller's performance of this Agreement is
        and will continue to be compatible with the latest software release of
        the Gas Industry Standards Board.

        IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed by their respective officers thereunto duly authorized as of the Day
and year first written,

BOSTON GAS COMPANY                             EL PASO ENERGY MARKETING COMPANY
By: /s/ William R. Luthern                     By: /s/ Kathleen Eisbrenner
        -----------------------                        ----------------------
        Signature                                      Signature

        William R. Luthern                             Kathleen Eisbrenner
        -----------------------                        ----------------------
        Print Name                                     Print Name

        Vice President                                 Vice President
        -----------------------                        ----------------------
        Buyer                                          Seller

ESSEX GAS COMPANY                              COLONIAL GAS COMPANY
By: /s/ William R. Luthern                     By: /s/ William R. Luthern
        -----------------------                        ----------------------
        Signature                                      Signature

        William R. Luthern                             William R. Luthern
        -----------------------                        ----------------------
        Print Name                                     Print Name

        Vice President                                 Vice President
        -----------------------                        ----------------------
        Buyer                                          Buyer

<PAGE>

              AMENDMENT TO THE GAS RESOURCE PORTFOLIO MANAGEMENT
             AND GAS SALES AGREEMENT BETWEEN BOSTON GAS COMPANY,
             COLONIAL GAS COMPANY, AND ESSEX GAS COMPANY AS BUYER
                AND EL PASO ENERGY MARKETING COMPANY AS SELLER
                             DATED SEPTEMBER 14,1999

Whereas, Boston Gas Company, Colonial Gas Company and Essex Gas Company
(hereinafter jointly referred to as "Buyer") and El Paso Energy Marketing
Company ("Seller") are parties to a certain Gas Resource Portfolio Management
and Gas Sales Agreement dated September 14, 1999 (the "Agreement"; and,

Whereas, the parties wish to clarify certain provisions of the Agreement with
respect to the timing of transfer of title to natural gas in Underground
Storage;

And Whereas, the Department of Telecommunications and Energy's October 18, 1999
order in D.T.E. 99-76 approving the Agreement required that the Agreement be
amended to include certain reporting requirements by Seller to Buyer;

Now therefore in accordance with section 12.5 of the Agreement, the parties
agree to the following revisions to the Agreement:

I.   Section 4.1.1 of the Agreement is deleted and replaced with the following
     Section 4.1.1

4.1.1  Transfer of Gas in Underground Storage. The Initial Underground Storage
       Balance shall be under the control and discretion of Seller effective
       with the Term of this Agreement. Title to such Initial Underground
       Storage Balance shall reside with Buyer so long as the Gas remains in
       inventory and shall transfer to Seller upon withdrawal at no cost to
       Seller. No resale agreement or other indicia of the transfer other than
       this Agreement shall be necessary to evidence such transfer of title.
       Buyer warrants title to all Gas withdrawn from Underground Storage and
       delivered to Seller hereunder, and further warrants that such Gas is free
       from liens and adverse claims of every kind upon such delivery. Buyer
       will indemnify and save Seller harmless against all loss, damage and
       expense of every character on account of adverse claims to such Gas prior
       to the transfer of title from Seller to Buyer. Seller shall ensure that
       all tariff provisions and other compliance requirements of underground
       storage vendors applicable to Gas in underground storage are met and
       penalties are avoided. Any penalties incurred by Buyer or Seller as a
       result of Sellers utilization of Gas in underground storage shall be the
       sole responsibility of Seller. Prior to April 1st of each year. Seller
       and Buyer will agree on underground storage refill volumes to be injected
       into underground storage over the following seven Month period, such
       volumes to be priced in accordance with section 3.4 above. Unless
       otherwise agreed to in writing prior to March 15, 2002, at the end of
       this Agreement, Seller shall cause Buyer's underground storage to be 95
       percent full and return control, discretion and title of such Gas in
       underground storage to Buyer. Buyer and Seller agree to work together in
       complying with all contract termination provisions, including but not
       limited to the two (2) underground storage contracts that Buyer is holder
       of on National Fuel Gas Supply,

II.  The phrase "including the Ending Underground Storage Balance" is deleted
     from the second line of Section 6.2 of the Agreement.

III. The following section 12.10 is added to the Agreement:

12.10 Affiliate Transactions

       Seller shall inform Buyer quarterly as to the terms of any release or
       assignment of the portfolio assets listed in Appendix I to a competitive
       affiliate, or customers of a competitive affiliate. Such reports shall
       indicate that Seller has not released or assigned the portfolio assets
       without simultaneously posting the offering electronically on the
       bulletin board of the applicable interstate pipeline. For the purposes of
       these reports, competitive affiliate shall be defined as any unregulated
       affiliate that is engaged in the sale or marketing of products or
       services on a competitive basis.

All other terms and conditions of the Agreement shall remain in full force and
effect.

BOSTON GAS COMPANY                           COLONIAL GAS COMPANY

By:      William R. Luthern                  By:      William R. Luthern
     ------------------------------               ------------------------------
         Print Name                                   Print Name

     /s/ William R. Luthern                       /s/ William R. Luthern
     ------------------------------               ------------------------------
         Signature                                    Signature


         Vice President                               Vice President
     ------------------------------               ------------------------------
         Title                                        Title

         4 Nov. 99                                    4 Nov. 99
     ------------------------------               ------------------------------
         Date                                         Date


ESSEX GAS COMPANY

By:      William R. Luthern
     ------------------------------
         Print Name

By:  /s/ William R. Luthern
     ------------------------------
         Signature


         Vice President
     ------------------------------
         Title

         4 Nov. 99
     ------------------------------
         Date


EL PASO ENERGY MARKETING COMPANY

By:      Steve Durio
     ------------------------------
         Print Name

     /s/ Steve Durio
     ------------------------------
         Signature


         Vice-President, Marketing
     ------------------------------
         Title

         4 Nov. 99
     ------------------------------
         Date