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                                                                    EXHIBIT 10.1

                              [Hanover Letterhead]

                                 August 22, 2000

Mr. Peter Schreck
8800 Stonewall Court
Richland Hills, TX 76180

Dear Peter:

As a follow up to our conversation yesterday, this letter summarizes Hanover
Compressor Company's offer of employment to you to serve as the Company's Vice
President - Treasury and Planning based in Hanover's corporate office in
Houston, Texas. I am confident that your inclusion in Hanover's executive
management team will prove to be mutually rewarding and offer you the career
opportunity that you seek.

A job description describing the essential responsibilities of the Vice
President - Treasury and Planning position is attached. In this position you
will be responsible for all traditional treasury, cash management, credit and
collections, foreign exchange and risk management activities of the Company.
This position will also entail your direct involvement in the Company's
commercial and investment banking relationships, corporate capital structure,
external financing and financial relations with Wall Street, ratings agencies
and other parties essential to the Company's capital formation. Additionally, as
a critical member of the Company's executive management team you will be
involved with and responsible for the budgeting and planning activities of the
Company, working with other Hanover senior managers to accomplish the business
development and operating objectives of the Company.

The compensation for this position is as follows.

Base Salary:            $5,192.31 per pay period (26 pay periods per year).

Profit Sharing
Opportunity:            20-40% of annual base salary to be paid annually based
                        upon Company performance and personal performance
                        compared with agreed upon objectives and subjective
                        measures. A minimum profit sharing payment for
                        performance during 2000 will be $25,000.


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Mr. Peter Schreck
August 22, 2000

Equity Program:         Participation in the Company's "Management Equity
                        Program" whereby at employment commencement or the plan
                        next offering you will be invited to make a direct
                        personal investment in the Company's common stock
                        financed with your own funds to be matched (i) on a
                        two-for-one basis by your purchase of Company common
                        stock financed by a secured four year note provided by
                        the Company and (ii) on a one-for-one basis by a grant
                        by the Company of a non-qualified stock option to
                        purchase one share of Company common stock at the price
                        per share approximating that of your above-mentioned
                        direct personal investment in the Company's common
                        stock. In addition, further stock options grants may be
                        made to you depending upon your performance and
                        participating in the above-referenced Management Equity
                        Program.

Relocation
Allowance:              The Company will assume financial responsibility for the
                        specific relocation costs listed below with the
                        objective of covering all such documented costs subject
                        to a cap described below. As part of this program, the
                        Company will coordinate the movement of your household
                        goods and personal belongings on a direct bill basis
                        under its agreement with one of its national moving
                        companies. The Company will also reimburse you for
                        reasonable and customary closing costs and make a
                        one-time payment to you of $7,500 to cover incidental
                        expenses when related to your move. The Company will not
                        reimburse you for property, school and personal taxes,
                        related to the sale of your existing primary residence.
                        Additionally, under this program, the Company agrees to
                        (i) assume financial responsibility for third party
                        brokerage commissions related to the sale of your
                        current residence of up to 6 percent of the sale price
                        of your home or (ii) pay you a "sales incentive" of up
                        to 3 percent of the value of your home in the event that
                        you sell your home yourself without a third party
                        broker. The Company will also assume financial
                        responsibility for loan application, origination and
                        title insurance costs and miscellaneous warranty,
                        appraisal and related fees related to your purchase of a
                        new residence in Houston. Additionally, to help
                        facilitate your family's relocation to Houston, the
                        Company will reimburse you for reasonable out-of-pocket
                        travel expenses for a period of up to six months
                        following your start date. The Company will provide an
                        income tax gross up to you on taxes that may be owed
                        resulting from taxable relocation-related expenses.



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Mr. Peter Schreck
August 22, 2000

                        Based on the cost estimate attached, total Company
                        reimbursement for the above-referenced relocation and
                        related costs, excluding transitional, temporary living
                        and related travel expense or any "tax gross-up" (see
                        below) incurred within twelve months of your employment
                        start date shall be capped at $45,000. Whenever possible
                        these costs will be billed directly to the Company. To
                        the extent that payment of these costs result in taxable
                        relocation expense to you, the Company agrees to provide
                        an income tax gross up to you for such personal taxes
                        paid by you. Note that the Company may reclaim this
                        amount if you terminate your employment with the Company
                        without "good reason" within 12 months of your
                        employment start date.

Auto Allowance:         Either $500 per month or company furnished vehicle
                        (TBD).

Vacation:               Up to three weeks per year.

Employment
Agreement:              An agreement obligating the Company to make a severance
                        payment to you equal to one and one-half times your then
                        current annualized current salary and bonus compensation
                        in the event that you involuntarily terminate your
                        employment with the Company within the first twelve
                        months following a "Change of Control" of the Company.
                        This agreement will not obligate the Company to make a
                        severance payment to you in the event that you
                        voluntarily terminate your employment with the Company
                        without "Good Reason" or involuntarily terminate your
                        employment with the Company due to your death,
                        disability, or termination for "Cause". The agreement
                        will be paired with a non-competition agreement, which
                        shall preclude you from employment in Hanover's
                        principal lines of business for a period one year after
                        you terminate your employment with the Company
                        employment and shall terminate the above-referenced
                        severance payment to you in the event that you violate
                        this non-compete agreement.


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Mr. Peter Schreck
August 22, 2000

                        For purposes of this letter, voluntary termination of
                        employment for "Good Reason" shall be defined as any
                        situation in which your termination of employment with
                        the Company (i) promptly follows a material reduction of
                        your duties and responsibilities or a permanent change
                        in your duties and responsibilities which are materially
                        inconsistent with the type of duties and
                        responsibilities then in effect, (ii) promptly follows a
                        material reduction in your annual base salary (without
                        regard to bonus compensation, if any), (iii) promptly
                        follows a material reduction in your employee benefits
                        (without regard to bonus compensation, if any) if such
                        reduction results in your receiving benefits which are,
                        in the aggregate, materially less than the benefits
                        received by other comparable employees of the Company
                        generally or (iv) in the event continuation of
                        employment with the successor company requires
                        relocating to a different work location or the
                        incurrance of commuting hardship and you choose not to
                        relocate or incur the commuting hardship or (v) the
                        Board otherwise determines that a voluntary termination
                        by you is for "Good Reason" under the circumstances then
                        prevailing.

Additionally, as a full time employee, you will also be eligible to participate
in the various benefit programs offered by the Company. Enclosed please find a
summary of those programs. During the initial three-month eligibility waiting
period for health benefits, the Company will reimburse you for your actual cost
of continuing your current employer's health coverage under the Consolidated
Omnibus Reconciliation Act (COBRA) option. Pursuant to Company and ERISA
guidelines, your eligibility for participating in the Company's 401(k) plan will
occur on the 1st of the month following six months of service with the Company.

Peter, this offer is contingent upon providing Hanover with the required
documentation to complete the INS I-9 Form and the successful completion of a
drug screen. These activities, along with a full discussion of benefits and
completing the related forms, can be accomplished by calling me or Errol
Robinson, Director of Human Resources in the Hanover's corporate office at
281/447-8787.

Again, I'm confident that if your decision is to accept this offer, it will
prove to be mutually rewarding. Your inclusion in Hanover's senior management
group represents a very significant addition to the Company step and an
excellent career opportunity for both you and the Company.

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Mr. Peter Schreck
August 22, 2000

Any legal costs incurred by you to enforce the terms of this agreement will be
borne by Hanover Compressor Company or its successor company.

Your acceptance of this offer can be confirmed by signing the acceptance below
and returning a copy to my attention.

Sincerely,

/S/ WILLIAM S. GOLDBERG


William S. Goldberg

cc:  Mike McGhan

Accepted:  /S/ PETER G. SCHRECK         Date: 9/6/00
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                  Peter Schreck

Start Date:    9/1/00
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