September
      14, 2006











Energy
      Transfer Partners, L.P.


8801
      South Yale Avenue


Tulsa,
      Oklahoma 74137





Ladies
      and Gentlemen:




Reference
      is hereby made to (i) that certain Purchase and Sale Agreement (the **“CCE Acquisition
      Agreement”** ),
      dated
      as of September 14, 2006, by and among Energy Transfer Partners, L.P., a
      Delaware limited partnership ( **“ETP”** ),
      EFS-PA, LLC, a Delaware limited liability company ( **“EFS-PA”** ),
      CDPQ
      Investments (U.S.) Inc., a Delaware corporation, Lake Bluff Inc., a Delaware
      corporation, Merrill Lynch Ventures, L.P. 2001, a Delaware limited partnership,
      and Kings Road Holdings I LLC, a Delaware limited liability company, and (ii)
      that certain Redemption Agreement (the **“Redemption
      Agreement”** ),
      dated
      as of September 14, 2006, by and between CCE Holdings, LLC, a Delaware limited
      liability company ( **“CCE
      Holdings”** ),
      and
      ETP. Capitalized terms used herein but not defined herein shall have the
      meanings set forth in the Redemption Agreement.




Upon
      the
      closing of the transactions contemplated by the CCE Acquisition Agreement,
      CCE
      Acquisition LLC, a Delaware limited liability company ( **“CCE
      Acquisition”** ),
      and
      CCEA Corp., a Delaware corporation (“ **CCEA** ”),
      which
      are wholly owned subsidiaries of Southern Union Company ( **“Southern
      Union”** ),
      and
      ETP will own all of the membership interests in CCE Holdings. This letter is
      to
      set forth the understanding between Southern Union and ETP as to certain matters
      pertaining to the ownership and operation of CCE Holdings.




1. Waiver
      of Right of First Refusal. Promptly
      following the execution and delivery of this letter agreement, Southern Union
      will cause CCE Acquisition and CCEA to execute and deliver to ETP a waiver
      of
      their rights under Section 8.4 of the Amended and Restated Limited Liability
      Company Agreement, dated as of November 5, 2004, as amended, of CCE Holdings,
      related to the transfer of Class B Membership Interests pursuant to the CCE
      Acquisition Agreement.




2. Actions
      Upon Closing of CCE Acquisition Agreement. Upon the
      closing of the transactions contemplated by the CCE Acquisition
      Agreement:




(a)
      Southern Union will cause CCE Acquisition and CCEA to enter into, and ETP will
      enter into, that certain Second Amended and Restated Limited Liability Company
      Agreement of CCE Holdings in the form attached hereto as Exhibit
      A .




(b)
      The
      parties hereto will cause CCE Holdings, and Southern Union will cause its
      indirect, wholly owned subsidiary, SU Pipeline Management LP, to enter into
      that
      certain




190107_4





Energy
      Transfer Partners, L.P.


September
      14, 2006


Page
      2







Amended
      and Restated Administrative Services Agreement in the form attached hereto
      as Exhibit
      B ;
      and




(c)
      The
      Transfer Restriction Agreement dated as of November 4, 2004 given by Southern
      Union in favor of EFS-PA automatically shall terminate.




3. Actions
      Upon Termination of Redemption Agreement. If the
      transactions contemplated by the CCE Acquisition Agreement have been consummated
      but the transactions contemplated by the Redemption Agreement have not been
      consummated and the Redemption Agreement has been terminated, (i) Southern
      Union
      will cause CCE Acquisition and CCEA to, and ETP shall, enter into that certain
      Third Amended and Restated Limited Liability Company Agreement of CCE Holdings
      in substantially the form attached hereto an Exhibit
      C ,
      with
      such changes thereto as mutually agreed by the parties hereto as a result of
      negotiations in good faith with respect to any such changes, it being understood
      that the intent of the Third Amended and Restated Limited Liability Company
      Agreement of CCE Holdings is to provide ETP with the risks and rewards
      (including the profits and losses and cash flow) of Transwestern Pipeline
      Company, LLC, a Delaware limited liability company (“Transwestern”), and to
      provide Southern Union with the risks and rewards (including the profits and
      losses and cash flow) of CrossCountry Citrus, LLC, a Delaware limited liability
      company (“CC Citrus”), and its subsidiaries; (ii) the parties hereto will
      negotiate in good faith to enter into arrangements mutually satisfactory to
      such
      parties that are similar to those contained in the term sheet for a Transition
      Services Agreement set forth on Exhibit
      B to the
      Redemption Agreement and/or the Amended and Restated Administrative Services
      Agreement attached hereto as Exhibit
      B and that
      will enable ETP to exercise effective management and control over the business
      and affairs of Transwestern in conjunction with services provided by CCE
      Holdings and its affiliates and that will enable Southern Union to exercise
      effective management and control over the business and affairs of CC Citrus,
      (iii) Southern Union will take all necessary action to cause Transwestern
      Holding Company, LLC, a Delaware limited liability company (“TW Holdings”), to
      repay all of its outstanding indebtedness within 60 days following the
      termination of the Redemption Agreement (without transferring or encumbering
      its
      equity interests in, or assets of, Transwestern and without the use of any
      borrowings, financial support or guaranties from Transwestern), (iv) the parties
      hereto will cooperate to facilitate the refinancing by TPC of the Existing
      TPC
      Debt to the extent such debt would become due and payable as a result of the
      transactions contemplated by the CCE Acquisition Agreement or the Redemption
      Agreement, after taking into account any consents or waivers previously obtained
      by TPC, and in connection therewith, ETP will use its commercially reasonable
      best efforts to make available a bridge loan or other replacement financing
      to
      the extent necessary for TPC to avoid an acceleration of the payment of such
      debt, with all costs of such refinancing (including legal fees) to be borne
      by
      TPC, (v) Southern Union will cause CCE Holdings to pay to ETP an amount equal
      to
      the Cash Redemption Amount (as such term is defined in the Redemption Agreement)
      determined on the basis that the “Closing Date” for







Energy
      Transfer Partners, L.P.


September
      14, 2006


Page
      3







purposes
      of the determination of the Cash Redemption Amount is the date of the
      termination of the Redemption Agreement, and (vi) the parties hereto will follow
      the procedures specified in Section 2.4 of the Redemption Agreement to determine
      the Post-Closing Adjustment Amount, substituting Southern Union for CCE
      Holdings, and if the Post-Closing Adjustment Amount is positive, then ETP will
      pay to Southern Union the Post-Closing Adjustment Amount or, if the Post-Closing
      Adjustment Amount is negative, then Southern Union will pay to ETP the absolute
      value of the Post-Closing Adjustment, in each case in accordance with the
      procedures specified in Section 2.4(c) of the Redemption Agreement, substituting
      Southern Union for CCE Holdings.




4. Confidential
      Project Information. Upon the
      closing of the transactions contemplated by the Redemption Agreement and for
      a
      period of three and one-half years thereafter, Southern Union shall, and shall
      cause its Affiliates to: (i) maintain the confidentiality of any proprietary
      business information of TPC relating to the economic terms and conditions of
      the
      TPC Expansion Projects (the “ **Project
      Information** ”);
      provided, however, that such confidentiality obligation shall not apply in
      the
      event such Project Information is or becomes generally available to the public,
      and (ii) not use such Project Information in a manner intended to be detrimental
      to TPC’s pursuit of the TPC Expansion Projects or otherwise take any action to
      oppose or challenge the TPC Expansion Projects.




5. Termination
      of Confidentiality Agreement. Upon the
      closing of the transaction contemplated by the Redemption Agreement, the
      Confidentiality Agreement, dated July 25, 2006, between ETP and Southern Union,
      shall terminate.




[THE
      REMAINDER OF THIS PAGE INTENTIONALLY IS LEFT BLANK.]

















Energy
      Transfer Partners, L.P.


September
      14, 2006


Page
      4







Please
      signify your acceptance of and agreement with the foregoing by executing one
      copy of this letter where indicated below.







Sincerely
      yours,





**SOUTHERN
      UNION COMPANY**











By:
      /s/ ROBERT O. BOND


Name: 
      Robert O. Bond


Title: 
      Senior Vice President, Pipeline Operations








Accepted
      and agreed to as of September 14, 2006.








**ENERGY
      TRANSFER PARTNERS, L.P.**




By:  Energy
      Transfer Partners GP, L.P., its general partner




By:  Energy
      Transfer Partners, L.L.C., its general partner







By:
      /s/ KELCY WARREN


Name: 
      Kelcy Warren


Title:
      Co- Chief Executive Officer