<PAGE>

                                                                    Exhibit 10.7

                              FIRM OR INTERRUPTIBLE
                               GAS SALES AGREEMENT
                          GENERAL TERMS AND CONDITIONS

                                     between

                             ENGAGE ENERGY US, L.P.

                                    as Seller

                                       and

                         CASCADE NATURAL GAS CORPORATION

                                    as Buyer


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                              TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>         <C>                                                                                                    <C>
ARTICLE 1.  DEFINITIONS ...........................................................................................1

ARTICLE 2.  CONFIRMATION ..........................................................................................2

ARTICLE 3.  QUANTITY ..............................................................................................2

ARTICLE 4.  PRICE OF GAS ..........................................................................................5

ARTICLE 5.  TERM ..................................................................................................6

ARTICLE 6.  DELIVERY POINT; TITLE; RIGHTS OF POSSESSION ...........................................................6

ARTICLE 7.  MEASUREMENTS AND TESTS ................................................................................6

ARTICLE 8.  QUALITY OF GAS ........................................................................................6

ARTICLE 9.  DELIVERY PRESSURE .....................................................................................6

ARTICLE 10. BILLING AND PAYMENT ...................................................................................7

ARTICLE 11. REGULATION ............................................................................................8

ARTICLE 12. WARRANTIES OF TITLE ...................................................................................8

ARTICLE 13. CREDIT WORTHINESS .....................................................................................8

ARTICLE 14. ADDRESSES AND ACCOUNTS ................................................................................9

ARTICLE 15. FORCE MAJEURE ........................................................................................10

ARTICLE 16. TRANSFER AND ASSIGNMENT ..............................................................................11

ARTICLE 17. NON-WAIVER OF FUTURE DEFAULTS ........................................................................11

ARTICLE 18. ENTIRE AGREEMENT .....................................................................................11

ARTICLE 19. LIMITATION ON CLAIMS .................................................................................11

ARTICLE 20. MISCELLANEOUS ........................................................................................12

EXHIBIT A
</TABLE>

<PAGE>

                    FIRM OR INTERRUPTIBLE GAS SALES AGREEMENT
                          GENERAL TERMS AND CONDITIONS

___________________ AS OF THIS 1st day of November, 1998, ENGAGE ENERGY US,
L.P., a Delaware limited partnership ("Seller") and CASCADE NATURAL GAS
CORPORATION, a corporation ("Buyer") who may hereinafter be referred to
collectively as "Parties" or individually as "Party":

                                   WITNESSETH:

          WHEREAS, the Parties wish to enter into a Gas Sales Agreement
covering the sale, delivery and purchase of gas.

          NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the Parties agree as follows:

1.        DEFINITIONS

          1.1  The term "Agreement" shall mean these General Terms and
               Conditions and the Exhibit "A" hereto in effect from time
               to time.

          1.2  The term "gas" shall mean any mixture of hydrocarbons or of
               hydrocarbons and noncombustible gasses, in a gaseous state,
               consisting essentially of methane.

          1.3  The term "Btu" shall mean one (1) British thermal unit, which
               is the amount of heat required to raise the temperature of one
               (1) pound of water one degree (1*) Fahrenheit at sixty degrees
               (60*) Fahrenheit.
               Btu shall be measured on a dry basis at 14.73 p.s.i.a.

          1.4  The term "MMBtu" shall mean one million (1,000,000) British
               thermal units.

          1.5  The term "Seller's Transporter" shall mean the pipeline
               delivering gas at the Delivery Point(s).

          1.6  The term "Receiving Pipeline" shall mean the pipeline receiving
               gas at the Delivery Point(s) as such pipeline is identified in
               Exhibit "A", or absent such Receiving Pipeline, the pipeline
               delivering gas at the Delivery Point(s).

          1.7  The term "Delivery Point(s)" shall mean the point(s) identified
               in Exhibit "A" at which title to the gas is transferred from
               Seller to Buyer.

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          1.8  The term "Contract Quantity" (i) for each Exhibit "A" applicable
               to a firm transaction having a Delivery Period of one month or
               less, shall mean a quantity equal to the sum of the Daily
               Contract Quantity (as such is set forth in section 3.1 below)
               in effect for each day of the Delivery Period of the Exhibit "A"
               in question and (ii) for each Exhibit "A" applicable to a firm
               transaction having a Delivery Period of more than one month,
               shall mean a quantity, determined for each month in the Delivery
               Period of such Exhibit "A", equal to the sum of the Daily
               Contract Quantity in effect for every day of each month in such
               Delivery Period for which there is a Daily Contract Quantity.

          1.9  The term "Exhibit "A"" shall mean the confirmation of each
               transaction substantially in the form of Exhibit
               "A"/Confirmation attached to these General Terms and Conditions
               and made a part hereof.

          1.10 The term "Delivery Period" shall, for each Exhibit "A", mean the
               period of time that deliveries under each such Exhibit "A" are
               to be made.

2.        CONFIRMATION

          2.1  Seller will prepare and immediately transmit by facsimile to
               Buyer the Exhibit "A" attributable to each transaction.

          2.2  Either Party or both Parties may electronically record any oral
               statement made by telephone or otherwise by a representative of
               either Party which pertains or may pertain to formation or
               performance of a transaction.

3.        QUANTITY

          3.1  The Exhibit "A" shall set forth the service level (firm or
               interruptible) and the daily quantity of gas that the Parties
               intend to purchase and sell (the "Daily Contract Quantity")
               during the Delivery Period set forth in the Exhibit "A". More
               than one Exhibit "A" may be in effect between the Parties from
               time to time. Subject to the terms of this Agreement, the
               Parties agree to nominate, deliver and purchase such agreed
               upon Daily Contract Quantity.

               a.   If the service level is specified as "interruptible" in the
                    applicable Exhibit "A", then either party may interrupt the
                    sale or reduce the quantities to be sold without liability
                    to the other (except as set forth in section 3.2 below) if
                    Seller determines that it does not desire to sell gas to
                    Buyer or Buyer determines

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<PAGE>

                    that it does not desire to purchase gas from Seller. The
                    Parties shall promptly notify each other in the event of
                    changes in the quantities to be purchased or sold and shall
                    change their nominations to reflect such changes.

               b.   If the service level is specified as "firm" in the
                    applicable Exhibit "A", Seller shall sell and deliver and
                    Buyer shall purchase and receive each day the Daily Contract
                    Quantity specified in the applicable Exhibit "A" for the
                    Delivery Period specified in such Exhibit "A".

                    1.   If, for any Exhibit "A" in effect for firm service,
                         Seller fails to deliver the Contract Quantity and such
                         failure is not otherwise excused by any provision of
                         this Agreement, by operation of law or Buyer's failure
                         to meet its obligations hereunder, then Seller shall
                         compensate Buyer for all costs and expenses incurred
                         by Buyer in acquiring a quantity of gas ("Replacement
                         Gas"), up to but not in excess of the difference
                         between the Contract Quantity and the quantity
                         delivered during the Delivery Period of such Exhibit
                         "A" (or during each month thereof if the Delivery
                         Period of such Exhibit "A" exceeds one month), which
                         are (on a per MMBtu basis) in excess of the price
                         payable under such Exhibit "A" ("Buyer's Incremental
                         Costs"). Buyer agrees to use commercially reasonable
                         efforts to obtain Replacement Gas at the lowest price
                         available to Buyer. Within thirty (30) days after the
                         actual quantities delivered by Seller under the
                         applicable Exhibit "A" (or during each month thereof
                         if the Delivery Period of such Exhibit "A" exceeds one
                         month) are confirmed by Receiving Pipeline, Buyer
                         shall render to Seller a statement of Buyer's
                         Incremental Costs detailing the difference between the
                         Contract Quantity and the quantity delivered under
                         such Exhibit "A" during the period of time in question,
                         the quantity of Replacement Gas and the costs and
                         description of costs incurred by Buyer for such
                         Replacement Gas. Within thirty (30) DAYS of receipt
                         of Buyer's statement, Seller shall reimburse Buyer for
                         Buyer's Incremental Costs. Seller's reimbursement
                         of Buyer's Incremental Costs shall constitute
                         Buyer's sole and exclusive remedy for Seller's
                         failure to deliver gas under the Exhibit "A"
                         during the period of time in question and Seller
                         shall not, under any circumstances whatsoever, be
                         liable to Buyer for any

                                        3

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                         other costs, charges, expenses, losses or damages
                         (except as provided under Section 3.2 below) of
                         any nature or kind whatsoever whether direct or
                         indirect, foreseeable or not foreseeable,
                         consequential or incidental, arising from or in
                         any way attributable to or suffered as a result of
                         Seller's failure to deliver gas pursuant to the
                         terms of the Exhibit "A" in question and this
                         Agreement.

                         If, for any Exhibit "A" in effect for firm service,
                         Buyer fails to take the Contract Quantity and such
                         failure is not otherwise excused by any provision
                         of this Agreement, by operation of law or Seller's
                         failure to meet its obligations hereunder, and
                         Seller sells all or a portion of the difference
                         between the Contract Quantity and the quantity
                         taken by Buyer under the Exhibit "A" in question
                         (or during each month thereof if the Delivery
                         Period of such Exhibit "A" exceeds one month) to
                         another purchaser at a price less than the
                         applicable price payable under such Exhibit "A",
                         Buyer shall compensate Seller for the difference
                         between the price per MMBtu which would have been
                         paid to Seller under such Exhibit "A" and the price
                         per MMBtu paid to Seller by such other purchaser(s)
                         ("Seller's Incremental Costs"). Seller agrees to
                         use commercially reasonable efforts to sell such
                         gas at the highest price available to Seller.
                         Within thirty (30) days after the actual quantities
                         delivered under the applicable Exhibit "A" during
                         the period of time in question are confirmed by
                         Receiving Pipeline, Seller shall render to Buyer a
                         statement of Seller's Incremental Costs detailing
                         the difference between the Contract Quantity for
                         such Exhibit "A" and the quantity of gas taken by
                         Buyer under such Exhibit "A" during the period of
                         time in question, the quantity of gas not taken by
                         Buyer that was sold to another purchaser and the
                         price Seller received from such other purchaser(s)
                         for such gas. Buyer shall reimburse Seller for
                         Seller's Incremental Costs within thirty (30) days
                         of Buyer's receipt of Seller's invoice for Seller's
                         Incremental Costs. Buyer's payment of Seller's
                         Incremental Costs shall constitute Seller's sole
                         and exclusive remedy for Buyer's failure to take
                         gas under the Exhibit "A" during the period of time
                         in question and Buyer shall not, under any
                         circumstances whatsoever, be liable to Seller for
                         any other costs, charges, expenses,

                                        4

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                         losses or damages (except as provided under
                         Section 3.2 below) of any nature or kind
                         whatsoever whether direct or indirect, foreseeable
                         or not foreseeable, consequential or incidental,
                         arising from or in any way attributable to or
                         suffered as a result of Buyer's failure to take
                         gas pursuant to the terms of the Exhibit "A" in
                         question and this Agreement.

          3.2  The Parties agree to fully cooperate to eliminate imbalances
               between nominations and deliveries of gas on Seller's
               Transporter and Receiving Pipeline. If any scheduling or
               imbalance penalties or charges (including, but not limited
               to, cash-outs) are imposed upon a Party hereto by Seller's
               Transporter or Receiving Pipeline in accordance with the
               provisions of its tariff in effect from time to time, as a
               result of a Party's failure to deliver or purchase an agreed
               upon nominated quantity of gas or as a result of the other
               Party's failure to perform any of its obligations hereunder,
               then the failing Party shall reimburse the non-failing Party
               the dollar amount of such penalties (or the failing Party's
               portion thereof) within thirty (30) days following receipt
               of an invoice therefor.

4.        PRICE OF GAS

          4.1  Exhibit(s) "A" in effect from time to time shall state the
               price per MMBtu for the gas that is sold by Seller to, Buyer
               ("Price").

               a.   Seller shall pay or cause to be paid all taxes
                    imposed on or with respect to the gas prior to its
                    delivery at the Delivery Point(s). Buyer shall
                    pay, or cause to be paid, all taxes on or with
                    respect to the gas at and after its delivery at
                    the Delivery Point(s) including, without
                    limitation, any and all federal, state or local
                    sales, use, gross receipts, consumption, franchise
                    fee or other similar fees, taxes or charges that
                    may arise from or be levied upon a sale under this
                    Agreement. If Seller is required to remit or pay
                    such fees, taxes or charges, Buyer shall promptly
                    reimburse Seller for same.

               b.   If Buyer is entitled to purchase gas free from any
                    such taxes or charges, Buyer shall furnish Seller
                    the necessary exemption or resale certificate
                    covering the gas delivered hereunder at the
                    Delivery Point(s). Buyer agrees to indemnify and
                    hold harmless Seller from any and all costs,
                    charges and expenses of any nature incurred by
                    Seller as a result of Seller's reliance on Buyer's
                    representation of exemption.

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<PAGE>

5.        TERM

          5.1  This Agreement shall be effective as of the date first
               written above, and, subject to the other provisions hereof,
               shall remain in effect until terminated by either Party upon
               at least ten (10) days prior written notice given to the
               other Party with such termination to be effective as of the
               first day of the month following expiration of such ten (10)
               day notice period, provided, however, that if an Exhibit "A"
               is in effect, termination shall not be effective as to any
               Exhibit "A" then in effect until expiration of the Delivery
               Period of each such Exhibit "A".

6.        DELIVERY POINT(S); TITLE; RIGHTS OF POSSESSION

          6.1  Title and right of possession to all gas delivered and sold
               hereunder shall pass to Buyer at the Delivery Point(s).
               Seller shall be deemed to be in exclusive control and
               possession of the gas and shall be fully responsible for and
               shall defend and indemnify Buyer, its successors and
               assigns, against any damage, loss or injury caused by the
               gas prior to the Delivery Point(s). Buyer shall be deemed to
               be in exclusive control and possession of the gas and shall
               be fully responsible for and shall defend and indemnify
               Seller, its successors and assigns, against any damage, loss
               or injury caused by the gas at and after the Delivery
               Point(s).

7.        MEASUREMENTS AND TESTS

          7.1  The measurement and testing of the gas sold hereunder shall
               be in accordance with the established procedures in use by
               Seller's Transporter and applicable to gas delivered at the
               Delivery Point(s).

8.        QUALITY OF GAS

          8.1  All gas delivered under the terms of this Agreement shall at
               all times conform to the quality specifications of Seller's
               Transporter at the Delivery Point(s), as such specifications
               are contained in Seller's Transporter tariff(s) in effect
               from time to time (or in Seller's Transporter standard
               transportation service agreement if no tariff is
               applicable).

9.        DELIVERY PRESSURE

          9.1  Seller shall deliver the gas at the pressure prevailing in
               Seller's Transporter's facilities at the Delivery Point
               specified in Exhibit "A".

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<PAGE>

10.       BILLING AND PAYMENT

          10.1 On or before the twelfth (12th) day of each month during the
               term of this Agreement, Seller shall render a statement to
               Buyer for the total quantity of gas delivered to Buyer
               during the preceding month and for any other amount due
               Seller under this Agreement for which an invoice is not
               otherwise provided. Buyer shall pay to Seller, on or before
               the twentieth (20th) day of each month, the amount due based
               on Seller's statement. All such payments shall be made to
               Seller by wire transfer, in immediately available funds,
               directed to Seller's account set forth in Article 14 below.

               a.   To the extent that the actual quantity is not
                    available to Seller by the twelfth (12th) day of
                    each month, Seller may bill Buyer based on
                    nominated quantities, subject to reduction for any
                    known periods when nominated quantities were not
                    delivered and subject to later correction based on
                    actual data. If a statement is rendered based on
                    nominated quantities rather than actual
                    quantities, Seller shall render a corrected
                    statement as soon as possible after actual
                    quantities are known.

          10.2 If presentation of a statement by Seller is delayed after
               the twelfth (12th) day of a month, then the time for payment
               shall be extended correspondingly, unless Buyer is responsible
               for such delay.

          10.3 Buyer and Seller shall have the right during normal business
               hours, and upon reasonable prior notice, to examine the
               books, records and charts of the other Party to the extent
               necessary to verify any statement, charge or computation
               made pursuant to this Agreement.

          10.4 If Buyer fails to pay when due the amount of any statement
               rendered by Seller, Seller may immediately suspend
               deliveries of gas hereunder and interest on the unpaid
               amount shall accrue from the due date until the date of
               payment, at the lesser of (i) the then current prime rate of
               interest charged by Citibank, N.A. to its best commercial
               and industrial borrowers plus two percent (2%) or (ii) the
               maximum lawful rate. This Section 10.4 shall not bar either
               Party from asserting any other remedy it may have at law or
               in equity.

          10.5 If Buyer finds, within the later of (i) twenty-four (24)
               months after the date of any statement rendered by Seller or
               (ii) twenty-four (24) months after the date of any quantity
               adjustment by Seller's Transporter, that it has been
               overcharged and if Buyer has paid same and makes a claim for
               refund within such twenty-four (24) months,

                                        7
<PAGE>

               the overcharge, if verified by Seller, shall be refunded
               within thirty (30) days, without interest. If Seller finds,
               within the later of (i) twenty-four (24) months after the
               date of any statement rendered by Seller or (ii) twenty-four
               (24) months after the date of any quantity adjustment by
               Seller's Transporter, that there has been an undercharge in
               the amount billed in such statement, Seller may within such
               twenty-four (24) month period submit a statement for such
               undercharge to Buyer and Buyer upon verifying the same,
               shall pay the undercharge to Seller within thirty (30) days,
               without interest. No adjustments shall be made unless the
               other Party is notified of a claim prior to the expiration
               of the applicable twenty-four (24) month period.

11.       REGULATION

          11.1 This Agreement shall be subject to all valid applicable and
               effective laws, orders, rules, regulations and directives of
               all duly constituted Federal, State and local governmental
               authorities having jurisdiction.

12.       WARRANTIES OF TITLE

          12.1 Seller warrants that it has the right to sell all gas
               delivered and that such gas is free and clear of all liens,
               encumbrances and adverse claims. Seller shall indemnify
               Buyer and save it harmless from suits, actions, debts,
               accounts, damages, costs, losses and expenses arising from
               or out of this warranty.

          12.2 OTHER THAN THOSE EXPRESSLY STATED IN THIS AGREEMENT, THERE
               ARE NO GUARANTEES OR WARRANTIES, EXPRESS OR IMPLIED, OF
               MERCHANTABILITY, FITNESS, OR SUITABILITY OF THE PRODUCT FOR
               A PARTICULAR PURPOSE NOTWITHSTANDING ANY COURSE OF
               PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR LACK
               THEREOF INCONSISTENT WITH THIS PARAGRAPH.

13.       CREDIT WORTHINESS

          13.1 Prior to the commencement of deliveries and sales of gas
               under this Agreement, and at any time and from time to time
               thereafter, Buyer shall furnish Seller with credit
               information as may be reasonably required to determine
               Buyer's credit worthiness. If requested by Seller, Buyer
               shall provide Seller with a satisfactory letter of credit,
               guarantee or other good and sufficient security of a
               continuing nature and in a satisfactory amount, as
               determined by Seller in its sole discretion. At any time
               Seller may immediately suspend deliveries and sales of gas
               to Buyer if Seller, in its sole judgment, determines that

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<PAGE>

               Buyer's ability to pay for gas has become impaired for any
               reason. However, Seller may resume deliveries and sales of
               gas to Buyer at such time as Buyer has satisfied Seller of
               its ability to pay.

14.       ADDRESSES AND ACCOUNTS

          14.1 Notices and invoices to Buyer under this Agreement shall be
               made as follows:

               NOTICES:

                    Cascade Natural Gas Corporation
                    P.O. Box 24464 Seattle, WA 98124
                    Attention: Mickey Patton
                    Fax No.: 206-624-7215

               INVOICES:

                    Cascade Natural Gas Corporation
                    P.O. Box 24464 Seattle, WA 98124
                    Attention: Mickey Patton
                    Fax No.: 206-624-7215

               Notices and payments to Seller shall be made as follows:

               NOTICES:

                    Engage Energy US, L.P.
                    Five Greenway Plaza, Suite 1200
                    Houston, Texas 77046-0502
                    Attn: Contract Administration
                    Fax No.: (713) 877-3583

               PAYMENTS:

                    Engage Energy US, L.P.
                    Account #: 4071-9415
                    Citibank, N.A., N.Y., N.Y.
                    ABA #: 0210-00089

               Either Party may change its address or account as
               set forth in this Article by written notice to the
               other Party. Unless otherwise

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<PAGE>

               provided, all notices given by one Party to the
               other shall be sent by certified mail (return
               receipt requested), by courier delivery, by hand
               delivery or by telegraph or by facsimile and shall
               be effective upon receipt. However, routine
               communications, including monthly statements, shall
               be considered as delivered when mailed, properly
               addressed, by ordinary mail. Provided further, a
               communication by facsimile shall be deemed received
               on the next business day at the point of receipt if
               received at such point after four o'clock (4:00)
               p.m. or on a Saturday, Sunday or holiday recognized
               by the Party receiving the facsimile communication.

15.       FORCE MAJEURE

          15.1 If either Buyer or Seller is rendered unable wholly or in
               part, by force majeure or any other cause of any kind not
               reasonably within such Party's control to perform or comply
               with any obligation or condition of this Agreement, upon
               giving notice and reasonably full particulars to the other
               Party within a reasonable time after the event of force
               majeure, such obligation or condition shall be suspended
               during the continuance of the inability so caused and such
               Party shall be relieved of liability and shall suffer no
               prejudice for failure to perform the same during such
               period; provided, obligations to make payments shall not be
               suspended and the cause of suspension (other than strikes or
               lockouts) shall be remedied so far as possible with
               reasonable dispatch. Settlement of strikes and lockouts
               shall be wholly within the discretion of the Party having
               the difficulty. The term "force majeure" shall include,
               without limitation by the following enumeration, acts of God
               and the public enemy; failure or curtailment of
               transportation of gas by either Seller's Transporter or
               Receiving Pipeline; the elements; fire; accidents;
               breakdowns; shutdowns for purposes of necessary repairs or
               maintenance; relocation or construction of facilities;
               freezing, breakage, accidents or operational failures to
               wells, machinery or lines of pipe; inability to obtain
               materials, supplies, permits or labor to perform or comply
               with any obligation or condition of this Agreement; strikes
               and any other industrial, civil or public disturbances; and
               restraints of any government or governmental body or
               authority, civil or military.

          15.2 Notwithstanding the preceding paragraph, if the service
               level is specified as firm in the applicable Exhibit "A",
               interruption or curtailment of interruptible transportation
               by either Receiving Pipeline or Seller's Transporter shall
               not be considered an event of force majeure unless firm
               transportation by such pipeline(s) is also being interrupted
               or curtailed.

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<PAGE>

16.       TRANSFER AND ASSIGNMENT

          16.1 Any entity that shall succeed by purchase merger, or
               consolidation to the properties, substantially or in their
               entirety, of either Party shall be entitled to the rights and
               shall be subject to the obligations of its predecessor in
               title under this Agreement. No other assignment of this
               Agreement or of any rights or obligations hereunder shall be
               made by either Party without the written consent of the other
               Party, which consent shall not be unreasonably withheld. This
               Article 16 shall not prevent either Party from assigning;
               pledging or mortgaging its rights hereunder as security for
               its indebtedness. This Agreement shall be binding upon and
               inure to the benefit of the respective successors and
               permitted assigns of the Parties.

17.       NON-WAIVER OF FUTURE DEFAULTS

          17.1 No waiver by either Party of any one or more defaults by the
               other Party in the performance of this Agreement shall
               operate or be construed as a waiver of any future default or
               defaults, whether of a like or of a different character.

18.       ENTIRE AGREEMENT

          18.1 This Agreement constitutes the entire agreement between the
               Parties for the sale, delivery and purchase of gas as
               contemplated herein.

               This Agreement supersedes all prior negotiations,
               representations, contracts or agreements, either written or
               oral, regarding the subject matter hereof. No modification,
               alteration, or amendment of this Agreement and/or any Exhibit
               "A" in effect shall be binding upon either Party unless
               executed in writing by the Party to be bound.

19.       LIMITATION ON CLAIMS

          19.1 Neither Party shall be liable for any damages for any breach of
               this Agreement, unless a claim is presented in writing within
               two (2) years after the alleged damages occurred. The claim
               shall set forth in full the nature, character, cause, and amount
               of the damage.

          19.2 NEITHER PARTY HERETO SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
               CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES ARISING OUT OF, OR
               RELATED TO, A BREACH OF THIS AGREEMENT.

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<PAGE>

20.       MISCELLANEOUS

          20.1 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
               ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
               NOTWITHSTANDING ANY CONFLICT OF LAWS PRINCIPLES OF SAID
               JURISDICTION THAT MIGHT REQUIRE THE APPLICATION OF THE LAWS
               OF ANOTHER JURISDICTION.

          20.2 There is no third party beneficiary to this Agreement, and
               the provisions of this Agreement shall not impart rights
               enforceable by any person, firm or organization not a Party
               or not a successor or assignee of a Party to this Agreement.

          20.3 This Agreement was prepared jointly by the Parties hereto
               and shall not be construed more stringently against either
               Party hereto than the other.

          20.4 Each Party hereby certifies that its taxpayer identification
               number provided below is correct and each shall, upon
               request by the other, execute such forms as are necessary to
               verify same.

          20.5 The Parties represent and warrant that they have full and
               complete authority to enter into and to perform this
               Agreement. Each person who executes this Agreement on behalf
               of a Party represents and warrants that he or she has full
               and complete authority to do so and that their Party will be
               bound hereby.

          20.6 Descriptive headings used herein, if any, are neither part
               of this Agreement nor an aid to interpreting it.

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<PAGE>

          IN WITNESS WHEREOF, the Parties have caused these presents to be
executed in duplicate originals by their proper officers duly authorized in that
behalf, as of the date first above written.

                                        ENGAGE ENERGY US, L.P.

Name

                                        By:

                                             Name: Kevin Manuel
                                             Title: Vice President

                                             Taxpayer I.D. #76-052-7677

                                                   "Seller"

                                        CASCADE NATURAL GAS CORPORATION

                                        By:

                                             Name: King Oberg
                                             Title: Vice President
                                             Taxpayer I.D. #91-059-9090

                                                    "Buyer"

Signature page to Gas Sales Agreement between Engage Energy US, L.P. and
Cascade Natural Gas Corporation dated November 1, 1998.

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