Prepared and Filed by St Ives Burrups





  
  Exhibit 4.2


   Unofficial English translation
    of agreements originally drawn up in Spanish. In case of discrepancy the Spanish
    language version prevails 

  

NOVATION OF THE AGREEMENT OF JANUARY, 2000

  BETWEEN REPSOL YPF AND “LA CAIXA”



 In Madrid, on May sixteenth, two thousand and two,


BETWEEN

 AS PARTY OF THE FIRST PART,
      RAMÓN BLANCO BALÍN,
in the name and on behalf REPSOL YPF, S.A.

 AS PARTY OF THE SECOND PART,
      ANTONIO BRUFAU NIUBÓ, in the name and
on behalf LA CAIXA DE PENSIONS I ESTALVIS DE BARCELONA (“LA CAIXA”).

 With both parties recognizing sufficient legal capacity in each other for
issuance of this novation agreement,


WHO DECLARED

	 	1.	That on January 11, 2000,
        REPSOL YPF, S.A. and LA CAIXA DE PENSIONS I ESTALVIS DE BARCELONA (“LA
        CAIXA”) signed an agreement to regulate their respective shareholding
        interests in GAS NATURAL SDG, S.A. and ENAGAS, S.A., their representation
        in the management bodies of both companies and to establish determined
        principles for industrial activity, convening certain prior agreements
        because of the privatization of REPSOL, S.A. and ENAGAS, the replacement
        of the Instituto Nacional de Hidrocarburos by the Sociedad Estatal
        de Participaciones Industriales (SEPI), the new regulation of gas
        activities resulting from the Hydrocarbons Law, as well as the international
        expansion of REPSOL YPF, S.A. and GAS NATURAL SDG, S.A. This agreement
        permitted integration of GAS NATURAL SDG, S.A. (GAS NATURAL) into the
        REPSOL YPF group for accounting purposes (Art. 42 of the Commercial Code)
        and the securities market (Art. 4 of the Securities Market Law), with
        its financial statements to be encompassed in that group's consolidated
        statements through the system of full consolidation.



 






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	 	2.	That
        the agreement of January 11, 2000 was reported to the National Stock Market
        Commission (Comisión Nacional del Mercado de Valores) and
        the General Office of Economic Policy and Defense of Competition (Dirección
        General de Política Económica y Defensa de la Competencia)
        within the Economics Ministry and Treasury (Ministerio de Economía
        y Hacienda), to query on the obligation of submitting notification
        of the consolidation agreements since the status of GAS NATURAL, at that
        date, was defined as a company under the joint control of REPSOL, S.A.
        and LA CAIXA, with both partners having a significant participation in
        its capital and having an equal number of members on the Board of Directors
        of GAS NATURAL. The query was answered by a resolution from the General
        Office of Economic Policy and Defense of Competition (Dirección
        General de Política Económica y Defensa de la Competencia)
        on March 10, 2000, establishing “that the aforementioned agreement
        does not constitute a modification of the control structure of GAS NATURAL,
        since it did not result in a concentration pursuant to the provisions
        in Paragraph 2, Art. 14, Law 16/1989 of July 17, of Defense of Competition,
        thus REPSOL does not have a notification obligation in application of
        Art. 15 of the aforementioned Law.”

	 	 	 	 	 	 
	 	3.	After this agreement,
          the following events, among others, occurred which made it necessary
    for its adjustments and novation:

	 	 	 	 	 	 
	 	 	 	a)	 	Promulgation
        of Royal Decree Law 6/2000 of June 23, regarding urgent measures to intensify
        the competition in the markets for goods and services affecting the gas
        sector, and in particular ENAGAS S.A., classified as “the technical
        manager of the gas system,” establishing determined limits to direct
        or indirect participation in its share ownership, which was the reason
        for submission of the plan of action to the Secretaría de Estado
        de Economía, de la Energía y de la Pequeña y Mediana
        Empresa covered in Art. 10 of Royal Decree Law 6/2000, as well as
        the process presently underway of selling holdings in that company.

	 	 	 	 	 	 
	 	 	 	b)	 	The agreements
          in principle reached in March of this year, 2002, for reorganization
          of the midstream activities of gas and integration of business in the
    area of gas and electricity.



 






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	 	 	 	c)	 	The decision passed by the Board of Directors
          of REPSOL YPF, S.A. to sell a significant part of the share ownership
          of REPSOL YPF, S.A. in GAS NATURAL SDG, S.A. meaning exit of GAS NATURAL
          SDG. S.A. from the consolidated REPSOL YPF group, along with both parties'
          intention not to modify the shared control structure of GAS NATURAL,
    as previously referenced.

	 	 	 	 	 	 
	 	4.	In view of the
          aforementioned antecedents, and since it is the will of both parties
          to continue to create value for GAS NATURAL SDG, S.A. (which is the reason
          for their holdings), and to maximize its possibility of competing in
          the market in all of the business segments that are part of its public
          strategy, they have agreed the novation of the agreement of January 11,
    2000 pursuant to the following



 

STIPULATIONS



1.- GENERAL PRINCIPLES

REPSOL YPF, S.A. and LA CAIXA will at all times maintain the principles of
  transparency, independence and professionalism in the management of GAS NATURAL
  SDG, S.A., after its exit from the REPSOL YPF Group, by maintaining joint control
  over that company through a stable continued presence in its share ownership.



II.- LINES OF INDUSTRIAL
ACTIVITY

In conformity with these principles, both parties support that GAS NATURAL
  SDG, S.A. develop as lines of activity, those activities related to the business
  of natural gas, but with the exclusion of ownership of reserves, as well as
  electric generation and commercialization, telecommunications and any other
  activities necessary or appropriate for the development of its multiproduct
  strategy as indicated in its strategic plans and as explained to the markets,
  and those as may be approved at any time by its Board of Directors - all from
  activities within the scope of its corporate purpose and, specifically, the parity participation
  with REPSOL YPF, S.A. in the SG Midstream Corporation for development of the
  intermediate phase in the natural gas chain.

 






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III. - MANAGEMENT OF THE
CORPORATION

GAS NATURAL SDG, S.A. will be managed by its Board of Directors, which will
  act through an Executive Commission and other specific bodies.

a) Board of Directors of GAS NATURAL SDG, S.A.


REPSOL YPF S.A. and “la Caixa” undertake
    to exercise their voting rights at the general shareholders' meetings of
    GAS NATURAL
    SDG, S.A. to have
  its Board of Directors composed as follows:

	 	 	 	–	 	There will be twelve directors. A general
        shareholders' meeting will be convened to establish, among other things,
        the number of directors at twelve, after which the composition of the
    Board can be completed as established below.
	 	 	 	 	 	 
	 	 	 	–	 	Both parties will
        try to appoint as many members as possible to the Board of Directors
        from the total number established by the Board, in full compliance with
        the rights recognized for other shareholders by Article 137 of the Law
    on Corporations.
	 	 	 	 	 	 
	 	 	 	–	 	REPSOL YPF, S.A.
        will have the right to propose, and “la Caixa” will vote in
        favor of this proposal, 4 members to the Board of Directors. “la
        Caixa”, in turn, will have the right to propose, and REPSOL YPF,
        S.A. will vote in favor of this proposal, another 4 members to the Board
        of Directors. The remaining 4 members will be independent directors elected
    by mutual agreement of both parties.


 






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	 	 	 	–	 	In the event that
        one shareholder or group of shareholders, exercising the right granted
        by Article 137 of the Law on Corporations, in the manner set forth in
        Royal Decree 821/1991, or by consensus with the other shareholders, should
        appoint one or more directors, the parties, by mutual agreement, will
        adjust the number of members and composition of the Board so that they
        can fulfill the objective sought, and to the extent possible, keep the
        equilibrium between the directors designated by REPSOL YPF, S.A. and
    those designated by “la Caixa”
	 	 	 	 	 	 
	 	 	 	–	 	If directors are
        appointed by the Board of Directors itself to fill vacancies produced
        during each fiscal year, the directors designated by each of the parties
        will follow for such appointment the same criteria set forth in the preceding
    paragraphs.


b) Appointment to positions


For the positions to be appointed by the Board
    of Directors, “la Caixa” will
  propose someone to fill the position of President from the directors it has
  proposed, and REPSOL YPF, S.A. will propose someone to fill the position of
  Managing Director from among the directors it has proposed, with both parties
  agreeing that the directors proposed and appointed by each will vote in favor
  of the designation of these positions within the Board pursuant to the appointment
  power recognized herein.

c) Executive Commission of GAS NATURAL SDG, S.A.


The Executive Commission of GAS
    NATURAL SDG, S.A. will be made up of four members, two of whom will be proposed
    by REPSOL YPF,
    S.A.
    and the two remaining
  by “la Caixa”. Those proposed by “la Caixa” must include
  the President, who will also chair the Executive Commission, and those proposed
  by REPSOL YPF, S.A., the Managing Director.

 






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d)	Committees of the Board of
    Directors of GAS NATURAL SDG, S.A.


In addition to the Executive Commission of the Board of GAS NATURAL, SDG,
  S.A., a Nomination and Compensation Committee and an Audit and Control Committee
  will also be maintained on this company's Board of Directors. Neither of these
  committees will have delegated powers. Their functions will be to make studies
  and proposals.

The Nomination and Compensation Committee will
    be chaired by one of the directors appointed at the proposal of “la Caixa”,
    and the Audit and Control Commission will be chaired by one of the directors
    appointed at the proposal
  of REPSOL YPF, S.A.

The President of the Commissions cannot have the deciding vote.



IV. ENAGÁS S.A.

The arrangements of agreement of January 11, 2000 referred to ENAGAS, S.A.
  are subordinated to development and execution of plans and effects derived
  from Royal Decree Law 6/2000 of June 23, and acts and provisions arising from
  its application.



V. EFFECTIVE DATE OF THE
AGREEMENT

In all that it is not incompatible with the provisions herein, the agreement
  of January 11, 2000 will remain in effect.

This novation agreement will take
    effect on this day, upon contribution by REPSOL YPF, S.A. of a significant
    part of its previous holdings. It is the
  desire of both parties that this be extended over time to thus give a guarantee
  of stability to the company. Thus its duration will extend as long as each
  of the parties maintains or increases its actual share ownership, or keeps
  it until it reaches at least 15% of the capital representative of GAS NATURAL
  SDG, S.A. Furthermore, at the request of either of the parties, a change in
  the control structure of either of the parties or of GAS NATURAL SDG, S.A. will
    be grounds for termination of the agreement and mandatory waiver of the rights
    recognized hereunder.

 






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VI. - OBLIGATION TO REPORT
RELEVANT CIRCUMSTANCES

Both parties are required to inform each other, with sufficient advance notice,
  of any fact or decision that might affect compliance with these stipulations,
  or their efficacy, duration or effect.

Noncompliance with this obligation may be invoked by the other party as grounds
  for rescission of the agreement.



VII. - COMMUNICATION WITH
THE SECURITIES COMMISSION

This novation agreement will be
  reported to the National Stock Market Commission (Comisión Nacional
  del Mercado de Valores) and the markets, and published as a significant
  event. It will also be reported to the competent authorities in the area of
  competition regulations, in whatever manner is necessary to indicate novation
  of the agreement of January 11, 2000, but not a change in the shared control
  structure, which is already reflected in the agreement novated herein.

As evidence of their conformity, both parties have signed on the indicated
  date, May 16, 2002.



	REPSOL YPF, S.A.	LA CAIXA DE PENSIONS I ESTALVIS

DE BARCELONA (”THE FUND”)
	 	 
	Signed: Ramón Blanco Balín	Signed: Antonio
Brufau Niubó