<PAGE>
                                                  EXHIBIT  10.1
April 28, 1995


CASCADE NATURAL GAS CORPORATION
222 FAIRVIEW AVENUE NORTH
SEATTLE, WASHINGTON
98109
ATTENTION:     MS. MELISSA WHITTEN
               DIRECTOR, GAS SUPPLY

RE:  WINTER PEAKING SUPPLY - 1995 THROUGH 1998

Dear Melissa:

Further to our telephone conversation of 24 April 1995, the following are the
terms which CanWest Gas Supply U.S.A. Inc. ("CanWest") would be prepared to
offer to Cascade Natural Gas Corporation ("Cascade") for peaking volumes
commencing December 1, 1995:

SELLER:   CanWest Gas Supply U.S.A. Inc.

BUYER:    Cascade Natural Gas Corporation

TERM:     Sales and deliveries of natural gas may commence December 1,
          1995, and shall terminate February 28, 1998.

PERIOD:   The Period in which the deliveries may take place and Demand Charges
          will be calculated over, will begin on the 1st day of December and end
          on the last day of February, during each year of the contract Term.

POINT OF
DELIVERY: The Point of Delivery shall be the point at which the facilities
          of Northwest Pipeline interconnect with the facilities of Cascade
          Natural Gas at Cascade's citygate(s).


<PAGE>

                               Cascade Natural Gas
                                 April 28, 1995
                                     Page 2


VOLUME:   The Daily Contracted Quantity (DCQ) over the term of the agreement
          shall be 15,000 MMBtu/day. Volumes will be available up to 30 days 
          each year during the Term of the contract.

PRICE:    CanWest is prepared to offer the either of the following pricing
          alternatives. The Buyer will be responsible for the Demand Charges
          described under each pricing option, on the full DCQ on a monthly
          basis.

OPTION #1 FIXED COMMODITY PRICE

The Gas price for each Period under this alternative shall consist of two 
components, a Commodity Charge Portion (CCP) for all gas volumes delivered and
a Demand Charge Portion (DCP) to apply to the DCQ volume specified at the 
Point of Delivery.

Dec 1995 - Feb 1996 CCP = $[*]/MMBtu    DCP = $[*]/MMBtu
Dec 1996 - Feb 1997 CCP = $[*]/MMBtu    DCP = $[*]/MMBtu
Dec 1997 - Feb 1998 CCP = $[*]/MMBtu    DCP = $[*]/MMBtu

OPTION #2 MARKET BASED COMMODITY PRICE

The Gas price for each Period over the
Term of the contract under this alternative shall consist of two components, a
Commodity Charge Portion (CCP) for all gas volumes delivered and a Demand Charge
Portion (DCP) to apply to the DCQ volume specified at the Point of Delivery.

     CCP = either
                    (i)  [*]% of the average first of the month "Inside FERC"
                         Index at the Cdn. Border and Rocky Mountain for 
                         delivery into Northwest Pipeline at Sumas, WA "lnside
                         FERC" @ Sumas for the month in which gas is sold and
                         delivered.
                    
                 or
                    (ii) Average of the posted daily price survey range as
                         reported by "Gas Daily" for delivery @ NW Sumas &
                         Northwest Rockies for the day in which gas is sold and
                         delivered, plus US $[*]/MMBtu.

DCP = $[*]/MMBtu
[*]= CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION<PAGE>


<PAGE>
                            Cascade Natural Gas
                              April 28, 1995
                                  Page 3

GAS NOMINATIONS:
          Buyer shall provide to Seller a nomination for any specific gas day by
          0830 hours Pacific time, the day of the gas day. This notice shall be
          sent via facsimile to CanWest's Operations Department at (604) 681-
          6890.

TRANSPORTATION:
          Seller will deliver all volumes under its firm transportation to the
          Point(s) of Delivery. Buyer shall be responsible for all
          transportation arrangements downstream of the Points of Delivery.

SUBSTITUTE
SUPPLIES: If for any reason on any day during the term of this Agreement, other
          than a day wholly or partially covered by Force Majeure, Seller fails
          or is unable to deliver to Buyer a volume of gas up to the MDQ which
          is nominated by Buyer, Buyer shall be entitled to acquire the
          deficient volumes from alternative sources of supply. Seller agrees to
          reimburse Buyer for any additional cost incurred by Buyer to secure
          the supply from an alternate source, provided the Buyer uses best
          efforts to mitigate any costs in securing the alternate supply which
          shall include utilizing Seller's transportation capacity in the event
          Buyer is able to do so.

PAYMENT
TERMS:    For all deliveries of natural gas payment must be made by wire
          transfer on or before the 25th of the month following deliveries

CONDITIONS
PRECEDENT:
          A.   Buyer obtaining by (Date to be scheduled) the necessary
               regulatory authorizations.

          B.   Seller obtaining by (Date to be scheduled) the necessary
               regulatory authorizations, including CanWest Management and
               Producer approval.

          C.   The executed gas sales agreement will be the only binding
               commitment of the parties hereunder. Should the Buyer fail to
               execute such a gas sales agreement, CanWest may terminate the
               sale and delivery of gas contemplated herein.<PAGE>
          

<PAGE>
                             Cascade Natural Gas
                               April 28, 1995
                                   Page 4


TERM
OPTION:   In the event a Producer vote on the three year agreement outlined
          above is unsuccessful, CanWest is prepared to offer the following:

          ONE YEAR EVERGREEN AGREEMENT
          CanWest is prepared to offer the all the conditions of the agreement
          defined above for the same three year term provided a clause is
          incorporated into the contract which allows either Buyer or Seller an
          annual option to discontinue the contract.  Such an option will
          eliminate the need to obtain CanWest producer approval.

CanWest is prepared to complete these negotiations in order that we can initiate
the necessary producer mail ballot. If the foregoing reflects Buyer's intentions
concerning this proposal, please so indicate by signing and returning one copy
of this letter by MAY 15, 1995. This offer may be extended if mutually agreed
upon by both CanWest and Cascade.

If you have any further questions pertaining to this proposal please do not
hesitate to contact me at (604) 661-3305.

Yours very truly,
CANWEST GAS SUPPLY INC.





Rick J. Kunz
Pacific Northwest Term Marketing

The above is hereby understood and agreed to this ___________ day of
___________, 1995.



                                                                       
CASCADE NATURAL GAS CORPORATION

cc. C.Coe