Agreement No. ______________________

                        OPERATING & MAINTENANCE AGREEMENT


This Agreement, ("Agreement") made and entered into as of the 20th day of June, 
1996 (the "Effective Date"), by and between Morgan Associates, Inc., a Kansas 
corporation, hereinafter  referred  to as  "MORGAN", and Enron Liquids  Pipeline
Operating Limited Partnership, a Delaware limited partnership, hereinafter 
referred to as "ELPOLP".

                                WITNESSETH THAT:

     WHEREAS,  MORGAN will own that certain  Odessa  Lateral and Meter  facility
located  in  Ector  County,  Texas,  as more  fully  described  in  Exhibit  "A"
(hereinafter referred to as the "Facility"); and

     WHEREAS, MORGAN desires that ELPOLP, as an independent contractor,  operate
and maintain the Facility on behalf of and as agent for MORGAN; and

     WHEREAS,  the parties desire to set forth their rights and responsibilities
with regard to the operation and maintenance of the Facility.

     NOW,  THEREFORE,  in consideration of the terms and conditions  hereinafter
set forth, the parties agree as follows:

                                    ARTICLE I
                                RESPONSIBILITIES


1.1  Designation of ELPOLP. This Agreement shall be effective upon the Effective
     Date   designated   above,   but  the   parties'   respective   duties  and
     responsibilities  for payment  hereunder  shall  commence upon the "Initial
     Transportation  Date" under that certain  Transportation  Agreement between
     MORGAN and ELPOLP related to the Facility (the "Commencement Date").

1.2  Responsibilities and Rights of ELPOLP. As operator of the Facility,  ELPOLP
     shall provide all operations,  maintenance,  administration,  construction,
     engineering  and emergency  services  necessary to operate and maintain the
     Facility in good operating  condition and in accordance with all applicable
     laws and  regulations  (the  "Operations  and  Maintenance").  ELPOLP shall
     operate and maintain the Facility pursuant to and consistent with (i) sound
     and prudent  carbon dioxide  pipeline  industry  practices,  (ii) the laws,
     rules,  or  regulations  of  the  DOT,  Local,  State,   Federal  or  other
     appropriate  jurisdictional  body,  and  (iii)  such  reference  documents,
     including: a) Engineering Standards Enron Gas Pipeline Group


<PAGE>



     (Vols. I, II, III); b) Central Basin Pipeline
     Operating Procedures Manual; and c) Enron Liquids
     Pipeline Company Environmental Policy and Procedures
     Manual.  MORGAN shall provide, for use by ELPOLP,
     design, construction, operation and maintenance
     information, including, but not limited to,
     "as-built" drawings, schematics, and flow diagrams as
     applicable, as ELPOLP may reasonably request from
     time to time, to allow ELPOLP to perform its
     obligations hereunder.

1.3  Services  Provided  ELPOLP.  ELPOLP as agent for MORGAN  shall  provide the
     following services for MORGAN relative to the Facility:

     (a) Operations and Maintenance Services.  ELPOLP
         shall procure and furnish all materials,
         equipment, services, supplies, and labor
         necessary for the operation and maintenance of
         the Facility, including, but not limited to, the
         following:

         (1)  Communications, corrosion control,
              monitoring, and measurement;

         (2)  Periodic testing, adjustment,  external and internal inspection of
              the Facility, and such maintenance, reconditioning, or overhaul as
              may be necessary and  appropriate  to maintain  valves,  pipeline,
              orifice, displacement and other meters, and such other facility as
              may be required to operate and maintain the Facility;

         (3)  Cathodic protection of the Facility for the
              control of corrosion and subsequent
              monitoring as necessary;

         (4)  Equipment and facility repair, overhaul, and
              replacement, as necessary;

         (5)  Administrative and supervisory services;

         (6)  Pay and  discharge  all costs and expenses  incurred in connection
              with the operation  and  maintenance  of the Facility  pursuant to
              this Agreement;

         (7)  Protect  all  interests  in real  estate  covering  the  Facility,
              including,   without   limitation,   rights-of-way,   easements,
              leaseholds, permits, licenses, fee lands and any other real estate
              interests associated with the Facility;  comply with all the terms
              and  conditions  of  the   rights-of-way   documents;   refer  all
              rights-of-way  landowner  matters to MORGAN when received;  notify
              MORGAN of

                             2

<PAGE>



              all  encroachments  upon the  rights-of-way  as soon as reasonably
              practical after ELPOLP discovers such encroachments, and cooperate
              fully with MORGAN in the  resolution of all such  matters;  MORGAN
              shall  timely  provide   ELPOLP  notice  of  all   correspondence,
              communications,  or other  information it receives  related to and
              any changes regarding MORGAN's interest in the rights-of-way;

         (8)  Provide all consumable supplies and
              materials necessary for the operation and
              maintenance of the Facility;

         (9)  Provide technical services as required for
              maintenance of the Facility;

         (10) Maintain logs and regulatory records relating to the operation and
              maintenance  of  the  Facility   including,   without  limitation,
              Department of Transportation  records required under the Hazardous
              Liquids   Pipeline   Safety   Act  and   regulations   promulgated
              thereunder;

         (11) Notify  MORGAN,  as  expeditiously  as possibly,  of all incidents
              relating to the Facility  which are  reportable  under the laws or
              regulations  of the Railroad  Commission  of Texas,  Department of
              Transportation, or other governmental agency with jurisdiction;

         (12) Respond to and follow as expeditiously as possible all of MORGAN's
              directions  relating to the volumes of carbon dioxide which are to
              be received into and shipped out of the Facility;

         (13) Obtain,  if  necessary,  and maintain  all required  environmental
              permits and other authorizations  (including,  without limitation,
              air   emissions,   water   use,   or  water   discharge   permits,
              collectively,  "Permits")  necessary  to operate and  maintain the
              Facility, make all required reports under the Permits, and operate
              at  all  times  in  compliance  with  all   environmental   rules,
              regulations, orders and laws;

         (14) Notify MORGAN,  as expeditiously as possible,  of all accidents or
              incidents  arising out of the  operation  and  maintenance  of the
              Facility  resulting  in death or personal  injury or damage to the
              Facility or third party property; notify MORGAN of all claims

                             3

<PAGE>



              received by ELPOLP relating to such
              accidents or incidents;

         (15) Assure that all carbon dioxide delivered into MORGAN shall conform
              to the  minimum  specifications  established  by MORGAN (as may be
              amended from time to time) for such carbon  dioxide if at any time
              the carbon dioxide  tendered for delivery shall fail to conform to
              such  quality   specifications   and  is  not  remedied  within  a
              reasonable  length of time, ELPOLP shall notify MORGAN of the lack
              of   conformity.   The   current   version   of   carbon   dioxide
              specifications  as established  by MORGAN are attached  hereto and
              incorporated hereby as Exhibit "B";

         (16) Perform all carbon dioxide measurement activities for the Facility
              as specified by MORGAN,  and preserve all test data,  charts,  and
              other  required  data  pertaining  to the  measurement  of  carbon
              dioxide  for a period of three (3) years or such  other  period as
              may be prescribed by regulatory authorities with jurisdiction; and

         (17) Collect  appropriate  information and prepare and deliver periodic
              invoices to those  persons for whom MORGAN has, from time to time,
              any agreement for the transportation of carbon dioxide through the
              Facility.  Such  invoicing  shall be done in  accordance  with the
              terms and  requirements of the agreements  between MORGAN and such
              persons for whom carbon  dioxide is  transported,  including  such
              requirements  regarding  the  frequency of invoicing and invoicing
              for minimum transportation, "take or pay" or similar requirements.
              MORGAN will deliver copies of any such  agreements or arrangements
              to ELPOLP as may be reasonably required in order to facilitate its
              invoicing function hereunder.

     (b) Emergency Services. In the case of an explosion,  fire, storm, or other
         emergency  which might threaten life or property or render the Facility
         or any part  thereof  incapable of  continued  operation,  ELPOLP shall
         immediately  take such steps and incur such expenses as are required to
         deal with such emergency including,  without limitation,  employment of
         third  parties.  MORGAN shall  reimburse  ELPOLP each calendar year for
         expenditures incurred during such year for payment of said expenses.

1.4  DOT/Rights-of-Way Costs.  ELPOLP shall be responsible
     for payment of all periodic payments to DOT or other
     governmental

                             4

<PAGE>



     authority  with  respect to  operation  or  ownership  of the  Facility  or
     payments due under the rights-of-way documents and all damages which may be
     due on the  rights-of-way  which arise out of the operation and maintenance
     of the Facility  (collectively the "Periodic  Costs"),  including,  without
     limitation,  the costs of moving and removing facilities as required by the
     rights-of-way  documents.  MORGAN shall reimburse ELPOLP each calendar year
     for that  portion of the  Periodic  Costs  incurred  during  such year that
     exceed  $1,000.00,  except that MORGAN  shall not be required to  reimburse
     ELPOLP for any portion of the Periodic Costs (e.g.,  rights-of-way damages)
     that are caused by ELPOLP's negligence, willful misconduct or breach of the
     requirements of this Agreement.

1.5  Additions or Modifications.  As MORGAN's agent, with no ownership  interest
     in the facility,  ELPOLP shall make no additions or major  modifications to
     the  Facility  without  the  prior  written  consent  of  MORGAN.  All such
     additions and modifications  shall be constructed in accordance with normal
     industry  standards and the requirements of 49 CFR Part 195, as applicable,
     and shall conform to MORGAN's designated  standard operating  procedures as
     provided in the  manuals  provided  ELPOLP as stated in Article 1,  Section
     1.2. ELPOLP shall be solely  responsible for the  construction,  operation,
     and  maintenance  of such  additions  during the term  hereof.  MORGAN will
     reimburse  ELPOLP the total  amount for  capital  expenditures  incurred
     during such year.

1.6  Subcontracting.  It is understood and agreed that MORGAN shall not contract
     with any third party for the  performance of ELPOLP's duties to operate and
     maintain  the  Facility  hereunder,  or any part  thereof,  nor  assign its
     rights,  duties, or obligations  hereunder,  unless mutually agree.  ELPOLP
     shall have the right to contract with third parties for routine  operation,
     maintenance,  or  construction  services  such as, and  including,  but not
     limited to, painting, x-ray, chart integration, measurement, accounting, or
     other  similar  type  services.  ELPOLP shall cause each  subcontractor  to
     assume and satisfy all  obligations of ELPOLP  hereunder to the full extent
     same may be applicable to the portions of the  Operations  and  Maintenance
     subcontracted.  ELPOLP  shall be liable for all acts and  omissions  of any
     subcontractor,  or any of their  employees  or agents,  as if  performed or
     omitted by ELPOLP.

1.7  Costs and  Expenses.  Commencing  on the  Commencement  Date,  ELPOLP shall
     provide all  operating  services  provided for hereunder in exchange for an
     annual  fee  of  $75,000,  payable  and  due  quarterly  in the  amount  of
     $18,750.00 on the first day of each quarter (calendar  quarters starting on
     January 1, April 1, July 1 and October 1). ELPOLP agrees to promptly pay

                             5

<PAGE>



     all its vendors and  contractors  to insure that no liens are filed against
     the  Facility  for the  providing  of goods  or  services  relating  to the
     Facility,  and ELPOLP shall immediately take appropriate remedial action to
     have such liens  released if they are filed.  If ELPOLP  fails to take such
     action,  MORGAN may take  whatever  action is  necessary to have such liens
     released,  including  the payment of the claimed  indebtedness,  and ELPOLP
     shall reimburse MORGAN for all costs,  expenses,  and payments made to have
     such liens released.

                                   ARTICLE II
                      PERFORMANCE OF OPERATOR'S OBLIGATIONS


2.1  Morgan's Right to Inspect.  At all times during the term of this Agreement,
     MORGAN  shall  have the right to  inspect,  or cause to be  inspected,  the
     Facility and the performance of ELPOLP's duties hereunder, and the right to
     consult  with  ELPOLP to assure  that  ELPOLP is  properly  performing  its
     duties.  The duties to be performed  hereunder by ELPOLP shall be performed
     as  MORGAN's  agent,  and ELPOLP  shall have the right to select the means,
     methods,  and manner of performing its duties  hereunder in accordance with
     this Agreement.  MORGAN shall not have the right to direct,  supervise,  or
     control  ELPOLP or its  servants or  employees  in the  performance  of its
     duties  hereunder,  or as to the means,  manner,  and  methods in which its
     duties are performed except as required under this Agreement.

2.2  Failure  to Meet  Standards.  In the event  that  ELPOLP is  notified  of a
     failure  to meet  applicable  operating  requirements,  whether of the DOT,
     Local,  State,  Federal or other  appropriate  jurisdictional  body, and if
     ELPOLP does not correct such failure in ninety (90) days,  and continues to
     operate and maintain the Facility not in accordance with Paragraphs 1.2 and
     1.3 of this  Agreement and the standards  set forth  therein,  MORGAN shall
     have the option of (1)  requiring  such  compliance  by a suit for specific
     performance; (2) performing the required actions itself or by a third party
     subject to reimbursement  by ELPOLP;  and/or (3) terminating this Agreement
     and seeking such other relief as may be provided by law.

                                   ARTICLE III
                                     GENERAL


3.1  Independent Contractor.  The parties hereto agree
     that the Operations and Maintenance rendered by
     ELPOLP in the fulfillment of the terms and
     obligations of this Agreement shall be as an
     independent contractor, and this Agreement does

                             6

<PAGE>



     not create an  employer/employee  relationship  between  MORGAN and ELPOLP.
     ELPOLP is not  entitled to the  benefits  provided by MORGAN or its parent,
     subsidiaries or affiliates to their employees,  and ELPOLP is not an agent,
     partner,  or joint  venturer  of MORGAN,  its parent or any  subsidiary  or
     affiliate.  ELPOLP  shall act at its own risk and  expense in its  fulfill-
     ment of the terms and  obligations  of this  Agreement and agrees to employ
     and direct any persons performing any Operations and Maintenance hereunder.
     ELPOLP  shall not  represent  itself to third  persons  to be other than an
     independent  contractor of MORGAN, nor shall ELPOLP offer to agree to incur
     or assume any obligations or commitments in the name of MORGAN.

3.2  Insurance.   ELPOLP   agrees  to   maintain   policies   and   programs  of
     self-insurance  sufficient to protect from  liabilities  that ELPOLP may be
     responsible  for under this  Agreement.  MORGAN  shall be  responsible  for
     property insurance protection coverages (e.g., fire, lightning, earthquake)
     for the Facility.

3.3  General  Indemnity.  ELPOLP AND MORGAN AGREE TO INDEMNIFY,  DEFEND AND HOLD
     HARMLESS  THE OTHER PARTY FROM AND  AGAINST  ANY AND ALL  CLAIMS,  DEMANDS,
     LOSSES,  DAMAGES,  CAUSES OF ACTION,  SUITS AND  LIABILITIES OF EVERY KIND,
     INCLUDING ALL,  EXPENSES OF LITIGATION,  COURT COSTS,  AND ATTORNEYS' FEES,
     FOR INJURY TO OR DEATH OF ANY PERSON, OR FOR LOSS OR DAMAGE TO ANY PROPERTY
     CAUSED BY NEGLIGENT ACT OR OMISSION OF ANY EMPLOYEE, AGENT OR SUBCONTRACTOR
     OF THE INDEMNIFYING  PARTY IN THE PERFORMANCE OF THE  INDEMNIFYING  PARTY'S
     OBLIGATIONS  HEREUNDER.  IN THE EVENT ANY INJURY TO OR DEATH OF ANY PERSON,
     OR LOSS OR DAMAGE TO ANY PROPERTY IS CAUSED BY THE CONCURRENT NEGLIGENCE OF
     BOTH  PARTIES  HERETO OR OF EITHER  PARTY  HERETO  AND A THIRD  PARTY,  THE
     INDEMNIFYING  PARTY  HERETO  SHALL  INDEMNIFY  THE OTHER  PARTY ONLY TO THE
     EXTENT ITS NEGLIGENCE  CONTRIBUTED TO SUCH DAMAGE OR INJURY.  NEITHER PARTY
     SHALL HAVE  LIABILITY  FOR ANY CLAIM,  DAMAGE OR CAUSE OF ACTION  RESULTING
     FROM THE WILLFUL  MISCONDUCT,  BAD FAITH OR NEGLIGENT  ACTS OR OMISSIONS OF
     THE OTHER PARTY'S EMPLOYEES, AGENTS OR CONTRACTORS OR SUBCONTRACTORS.

     NOTWITHSTANDING ANY PROVISION OF THIS PARAGRAPH 3.3, WHERE PERSONAL INJURY,
     DEATH,  OR  LOSS OF OR  DAMAGE  TO  PROPERTY  RESULTS  FROM  THE  JOINT  OR
     CONCURRENT  NEGLIGENCE OR WILLFUL MISCONDUCT OF BOTH ELPOLP AND MORGAN, THE
     PARTIES'  DUTY OF  INDEMNIFICATION  SHALL BE IN  PROPORTION TO EACH PARTY'S
     ALLOCABLE  SHARE OF JOINT OR CONCURRENT  NEGLIGENCE OR WRONGFUL  MISCONDUCT
     EVEN IF ONE OF THE PARTIES IS MORE THAN FIFTY PERCENT (50%) AT FAULT.

3.4. Limitation of Liability.  NOTWITHSTANDING ANYTHING
     HEREIN TO THE CONTRARY, IN NO EVENT SHALL ELPOLP OR
     MORGAN BE LIABLE TO

                             7

<PAGE>



     THE OTHER  PARTY  HERETO FOR ANY LOST OR  PROSPECTIVE  PROFITS OR ANY OTHER
     SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL,  INCIDENTAL OR INDIRECT LOSSES
     OR DAMAGES (IN TORT,  CONTRACT  OR  OTHERWISE)  UNDER OR IN RESPECT  HERETO
     HOWSOEVER  CAUSED,  WHETHER OR NOT ARISING FROM ELPOLP'S OR MORGAN'S  SOLE,
     JOINT OR CONCURRENT NEGLIGENCE.

3.5  Claims.  MORGAN  shall  assert any and every  "Claim" of any kind or nature
     whatsoever under this Agreement  ("Claim" to include,  without  limitation,
     any  Claim  relating  to,  associated  with,  arising  out of or in any way
     incidental to the Operations and  Maintenance or the execution,  inducement
     to enter into, performance,  non-performance,  or breach of this Agreement)
     exclusively  against ELPOLP and not against any one or more of its partners
     nor  the  general  partner,  Enron  Liquids  Pipeline  Company,  nor  their
     officers,  directors,  employees, or agents nor entities affiliated with it
     by  common  ownership  or  control,   nor  any  of  them   individually  or
     collectively, and MORGAN shall enforce or attempt to enforce any such Claim
     (whether liquidated or unliquidated,  or by suit, lien, judgment, execution
     or otherwise)  exclusively against the assets of ELPOLP and not against the
     assets of any partner, general partner, affiliated entity, nor any of their
     officers,  directors,  employees  or agents,  except the general  partner's
     interest in ELPOLP.

3.6  Environmental  Waste.  Notwithstanding  any  provisions  contained  to  the
     contrary,  in the event that the Operations and Maintenance requires ELPOLP
     to  remove  or  handle  hazardous  materials,  waste or soils or  materials
     contaminated with such materials, waste or substances ("Waste"), except for
     Wastes  that  are  brought  onto   Morgan's   premises  by  ELPOLP  or  its
     subcontractors  or are present  upon  Morgan's  premises  arising  from the
     negligence or willful  misconduct of ELPOLP or its  subcontractors or first
     generated by ELPOLP or its  subcontractors  at their own  premises,  MORGAN
     SHALL REMAIN  RESPONSIBLE  FOR SUCH WASTES AND FOR ANY POLLUTION  EMANATING
     FROM MORGAN'S PREMISES AND SHALL DEFEND, INDEMNIFY AND HOLD ELPOLP HARMLESS
     FROM AND AGAINST ANY LOSS, COST, CLAIM, DAMAGE,  LIABILITY, FINE OR PENALTY
     INCURRED  BY ELPOLP  WHICH  RESULTS OR IS ALLEGED TO RESULT  FROM  ELPOLP'S
     PERFORMANCE OF SUCH OPERATIONS AND MAINTENANCE,  HOWEVER ARISING; PROVIDED,
     HOWEVER,  THAT THE FOREGOING  INDEMNITY SHALL NOT APPLY WITH RESPECT TO ANY
     SUCH  LOSSES,  COSTS,  CLAIMS,  DAMAGES,  LIABILITIES,  FINES OR  PENALTIES
     ARISING  FROM  THE  NEGLIGENCE  OR  WILLFUL  MISCONDUCT  OF  ELPOLP  OR ITS
     SUBCONTRACTORS.  Waste as used herein shall include, but not be limited to,
     any  garbage,  refuse,  sludge  and  other  spent  or  discarded  material,
     including  solid,  liquid,   semisolid,   or  contained  gaseous  materials
     resulting from industrial,  commercial,  mining and agricultural activities
     or from community or individual

                             8

<PAGE>



     activities,  and including all waste classified as "hazardous"  pursuant to
     the Resource  Conservation  and  Recovery  Act, as amended;  "toxic  waste"
     pursuant to the Toxic Substances Control Act, as amended; or asbestos.  The
     Operations and Maintenance provided hereunder shall in no event include the
     disposal or off site removal of Waste unless (i)  specifically  agreed upon
     in writing by a duly authorized  officer of ELPOLP,  or (ii) such Waste was
     brought on to  Morgan's  premises  by ELPOLP or its  subcontractors  or are
     present  upon  Morgan's  premises  arising from the  negligence  or willful
     misconduct of ELPOLP or its subcontractors.

3.7  Force  Majeure.  No delays in or failure or omission in the  performance or
     any obligation under this Agreement by ELPOLP or MORGAN, other than payment
     of money,  shall  constitute  default  under this  Agreement  if and to the
     extent such delay or failure of performance is caused by occurrences beyond
     the control of ELPOLP or MORGAN, and which by the exercise of due diligence
     such party shall not have been able to avoid or  overcome,  including,  but
     not  limited  to:  acts  of  God  or  a  public  enemy,   expropriation  or
     confiscation  of  facilities;  compliance  with any order or request of any
     governmental  authority;  fires,  floods,  explosion,  accidents;  strikes,
     walkouts  or other  concerted  work  stoppages,  breakage  or  accident  to
     machinery or lines of pipe,  the  necessity  for making  repairs,  tests or
     alterations  to  machinery  or lines of  pipe,  freezing  of lines of pipe,
     inability to obtain necessary material, supplies, permits, or right-of-way.
     If such time delay or other force majeure  condition  causes an increase to
     ELPOLP's  labor,  equipment,  or material costs to operate the  Facilities,
     ELPOLP shall furnish to MORGAN  supporting  documentation  evidencing  such
     increase in costs,  and ELPOLP  shall be  entitled to a fair and  equitable
     adjustment to ELPOLP's  total price for operating the  Facilities as stated
     herein.  In the  event  of a force  majeure  occurrence,  the  party  whose
     performance is prevented by such  occurrence  shall notify the other party,
     in  writing,  as soon as  reasonably  possible  and give  full  particulars
     thereof and shall  reasonably  endeavor to remedy the  situation as soon as
     possible.  It is  understood  and agreed that the  settlement of strikes or
     lockouts  shall be entirely  within the  discretion of the party having the
     difficulty,  and the  above  requirement  that any force  majeure  shall be
     remedied with all  reasonable  dispatch shall not require the settlement of
     strikes or lockouts by acceding to demands when such course is  inadvisable
     in the discretion of the party having the difficulty.

3.8  Ownership of Records and Materials. All records, materials and documents of
     whatever  kind or nature,  including  but not limited to,  reports,  plans,
     designs,  studies,  data,  maps,  drawings,  specifications,   construction
     records, engineering

                             9

<PAGE>



     records,  accounting  records,  right-of-way and easement  records,  permit
     records,  and purchasing records,  relating to the Facility and prepared or
     obtained by ELPOLP as agent in performing the  Operations  and  Maintenance
     hereunder,  shall be the  property of MORGAN and shall be held in temporary
     custody by ELPOLP.  Upon the  request of MORGAN,  all or any portion of the
     aforesaid records, materials,  documents,  including documents, records, or
     materials previously provided to ELPOLP by MORGAN (and all copies thereof),
     shall be  delivered to MORGAN in a manner  reasonably  requested by MORGAN;
     such obligation shall survive  termination of this Agreement.  The records,
     materials,  and documents  provided to ELPOLP as agent for MORGAN hereunder
     or prepared or obtained by ELPOLP in performing the services  hereunder and
     all information  which ELPOLP receives or becomes familiar with relating to
     the operation and maintenance of the Facility,  shall be kept confidential,
     and shall be  disclosed  to third  parties  only with the prior  consent of
     MORGAN.  ELPOLP's  obligations as regards  confidential  material shall not
     apply to (a)  information  already  in the  possession  of  ELPOLP  and not
     subject to a  confidentiality  obligation at the time of execution  hereof;
     (b) information which, at the time of disclosure,  was in the public domain
     or which, after disclosure,  becomes a part of the public domain through no
     fault of ELPOLP;  and (c) information  which was acquired by ELPOLP without
     violation  of any  confidentiality  obligation  from a  source  other  than
     MORGAN.

3.9  Safety.  ELPOLP shall be responsible  for and take all necessary and proper
     safety  precautions  to  protect  from  accident  or injury,  all  persons,
     including its employees and its subcontractors' employees, who may be at or
     on  MORGAN's  Premises  where  the  Operations  and  Maintenance  is  being
     performed. ELPOLP shall establish and enforce adequate, reasonable, prudent
     and proper safety rules and procedures and emergency  procedures  necessary
     for safe completion of the Operations and Maintenance.

3.10 Compliance With DOT Anti-Drug and Alcohol Misuse Regulations. MORGAN, under
     49 CFR Parts 199 and 40, is required by law to ensure  compliance  with the
     pipeline safety  regulations for drug and alcohol testing applicable to its
     contractors,   subcontractors  and  their  agents,  performing  operations,
     maintenance,  or emergency response functions on a pipeline or LNG facility
     subject to Parts 191,  192,  193 and 195 of Title 49 of the Code of Federal
     Regulations.  ELPOLP  agrees to  comply  with  such  requirements  and will
     require   compliance   by   its   employees,    agents,   contractors   and
     subcontractors.

3.11 General.  The terms and provisions of this Agreement
     are intended to supersede any conflicting terms or
     conditions in

                            10

<PAGE>



     any other agreement between the parties. This Agreement contains the entire
     agreement  between the  parties  and shall not be modified or  supplemented
     except  by  written  instrument  duly  executed  by  both  parties.  If any
     provision of this Agreement shall, for any reason, be held violative of any
     applicable law, and so much of said Agreement is held to be  unenforceable,
     then the invalidity of such a specific  provision  herein shall not be held
     to invalidate any other  provisions  herein,  which other  provisions shall
     remain in full force and effect  unless  removal of said invalid  provision
     destroys the  legitimate  purposes of this  Agreement,  in which event this
     Agreement  shall be canceled.  Termination  or expiration of this Agreement
     shall not  relieve  or  release  either  party  from any  breach or default
     occurring  prior to such  termination  or  expiration;  and the  terms  and
     provisions  of  Paragraphs  1.5,  3.3,  3.16 and  3.13  shall  survive  the
     termination of this  Agreement.  No waiver of any of the provisions of this
     Agreement  shall be  deemed  or shall  constitute  a  waiver  of any  other
     provisions  hereof  (regardless  of  whether  similar),  nor shall any such
     waiver constitute a continuing waiver unless otherwise expressly provided.

3.12 Descriptive Headings.  The descriptive headings of
     the provisions of this Agreement are formulated and
     used for convenience only and shall not be deemed to
     affect the meaning or construction of any provision.

3.13 Governing Law. Unless  otherwise  specified,  this Agreement and the rights
     and duties of the parties arising out of the Agreement shall be governed by
     and  construed in  accordance  with the laws of the State of Texas,  except
     provisions of that law referring to governance or  construction of the laws
     of another  jurisdiction.  Any action  arising out of this Agreement or the
     rights and  duties of the  parties  arising  out of this  Agreement  may be
     brought,  if at all, only in the courts of Texas.  Venue shall be proper in
     Harris County.

3.14 Non-waiver  of  Future  Default.  No waiver by any party of any one or more
     defaults  by the  other in  performance  of any of the  provisions  of this
     Agreement  shall operate or be construed as a waiver of any other  existing
     or future default or defaults, whether of a like or different character.

3.15 Contractual  Rights.  The terms and  provisions  of this  Agreement shall
     inure to the  benefit of and be binding  upon the  successor,  assigns  and
     representatives  of the parties  hereto.  The  provisions of this Agreement
     shall not impart rights enforceable by any person, firm or organization not
     a party or not bound as a party,  or not a permitted  successor or assignee
     of a party bound to this Agreement.

                            11

<PAGE>



3.16 Assignability.  Neither  party may assign its rights  under this  Agreement
     without the prior  written  consent of the other party,  which shall not be
     unreasonably  withheld.  Written consent to assign said rights shall not be
     necessary  when  this  Agreement  is  assigned  in  whole  or in  part to a
     wholly-owned  subsidiary  or  affiliate,  or by: (i) name  change,  or (ii)
     merger, or (iii) formation of a new company, or (iv) stock purchase. If and
     in the event MORGAN desires to sell the  Facilities  then MORGAN shall give
     at least thirty (30) days' notice to ELPOLP  setting  forth the name of the
     potential buyer and ELPOLP shall, within said thirty (30) day period, elect
     to either  terminate  this Agreement or to approve  MORGAN'S  assignment of
     this Agreement to the potential buyer.

                                   ARTICLE IV
                                      TERM


4.1  Term. Subject to all other provisions and conditions contained herein, this
     Agreement shall be deemed  operative and in full force and effect as of the
     Effective  Date and shall  continue for a primary term of twenty (20) years
     from the  Commencement  Date,  and shall extend forward from month to month
     thereafter,  unless and until  terminated  by either  party giving at least
     ninety (90) days' prior written notice to the other party.  Notwithstanding
     anything  herein to the contrary,  Morgan shall have the right to terminate
     this  Agreement at any time  effective  upon notice of such  termination to
     ELPOLP  in the  event of the  termination  or  expiration  of that  certain
     Transportation Agreement between Morgan and ELPOLP related to the Facility;
     and  Morgan  may elect to extend  this  Agreement  upon the same  terms and
     conditions  provided herein (excepting  prices) in the event that ELPOLP or
     its successors or assigns elects to extend or require that Morgan transport
     any Carbon  Dioxide for ELPOLP or its  successors or assigns  following the
     "Primary Term" of the Transportation Agreement.

                                    ARTICLE V
                                     NOTICES


5.1  Notices. All notices, consents, requests, invoices or statements provided
     for or  permitted to be given under this  Agreement  must be in writing and
     are effective on actual receipt by the intended recipient or by delivery to
     the address,  or facsimile  number during  working hours (8:00 a.m. to 5:00
     p.m. CST) for the recipient listed below:

                            12

<PAGE>




     To ELPOLP:                      To MORGAN:

     Enron Liquids Pipeline          Morgan Associates, Inc.
     Operating Limited Partnership   Attention:  William V. Morgan
     Attention:  Russell Martin      Plaza Time Building
     P. O. Box 1188                  411 Nichols Road, Suite 225
     Houston, Texas 77251-1188       Kansas City, Missouri 64112
     Telephone: 713-853-3589         Telephone: 816-931-5750
     Fax: 713-646-5824               Fax: 816-931-9170

     All notices,  invoices, and other communications  ("Notices") shall be sent
     to the parties at their  respective  addresses  in writing and as set forth
     above.  Notices sent through the mail shall be deemed to have been received
     on the third (3rd) day after post marking.

     IN WITNESS  WHEREOF,  this  Agreement is executed on the day and year first
above written.


"ELPOLP"                             "MORGAN"

Enron Liquids Pipeline Operating     Morgan Associates, Inc.
Limited Partnership

by Enron Liquids Pipeline Company,
its General Partner

By: /s/ Ray Kaskel                  By: /s/ William V. Morgan

Title: President                    Title: President


Witness/Attest

By: /s/ Thomas P. Tosoni            By:_____________________________

Title: Assistant Secretary          Title:__________________________

(SEAL)                              (SEAL)






                            13

<PAGE>



                                   EXHIBIT "A"

                        Odessa Lateral and Meter Facility


The 6 inch  pipeline  with its origin at mile marker 98.15 on the Central  Basin
Pipeline  running  easterly,  approximately  11.2  miles in  length,  and  meter
facility, with its terminus at the delivery point of Phillips' South Cowden Unit
enhanced oil recovery project,  all located in the T. & P. RR Co. Survey,  Block
42, 43, and 44, all Township 3 South, Ector County, Texas.




<PAGE>


                                   EXHIBIT "B"


Product   delivered  at  the   Origination   Point  shall  meet  the   following
specifications, which herein are collectively called "Quality Specifications":

     (a) Water.  Product shall contain no free water, and shall not contain more
         than thirty (30) pounds of water per MMcf in the vapor phase.

     (b) Hydrogen Sulphide.  Product shall not contain
         more than twenty (20) parts per million, by
         weight, of hydrogen sulphide.

     (c) Carbon Dioxide.  Product shall contain at least
         ninety-five mole percent (95%) of molecules
         containing one (1) atom of carbon and two (2)
         atoms of oxygen.

     (d) Total Sulfur.  Product shall not contain more
         than thirty-five (35) parts per million, by
         weight, of total sulfur.

     (e) Temperature.  Product shall not exceed a
         temperature of one hundred twenty degrees
         Fahrenheit.  (120(degree)F).

     (f) Nitrogen.  Product shall not contain more than
         four mole percent (4%) of nitrogen.

     (g) Hydrocarbons.  Product  shall not contain  more than five mole  percent
         (5%) of hydrocarbons and the dew point of Product (with respect to such
         hydrocarbons)   shall  not  exceed  minus  twenty  degrees   Fahrenheit
         (-20(degree)F).

     (h) Oxygen.  Product shall not contain more than ten
         (10) parts per million, by weight, of oxygen.

     (i) Other.  Product shall not contain more than 0.3 (three tenths)  gallons
         of glycol  per MMcf and at no time  shall  such  glycol be present in a
         liquid  state  at  the  pressure  and  temperature  conditions  of  the
         pipeline.






<PAGE>