Document:

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                                                                   EXHIBIT 10.28

                              GAS PURCHASE CONTRACT

                            SHELL OIL COMPANY, SELLER

                                       AND

                         ALASKA PIPELINE COMPANY, BUYER

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                         INDEX TO GAS PURCHASE CONTRACT

<TABLE>
<CAPTION>
ARTICLE                                           PAGE
-----------------------------------------------   ----
<S>                                               <C>
I      DEFINITIONS                                  2
II     POINT OF DELIVERY, CONSTRUCTION OF
       FACILITIES, OWNERSHIP AND CONTROL OF GAS     6
III    PRESSURE                                     8
IV     RESERVATIONS OF SELLER                       9
V      QUANTITY                                    11
VI     QUALITY                                     22
VII    PRICE                                       26
       (a) Annual price Adjustment                 26
       (b) Taxes                                   27
       (c) Excess Royalty payments                 30
VIII   MEASUREMENT                                 31
IX     AMOUNT OF SELLER'S GAS                      33
X      WARRANTY OF TITLE                           36
XI     BILLING AND PAYMENT                         37
XII    TAXES                                       38
XIII   FORCE MAJEURE                               39
XIV    DEFAULT AND TERMINATION                     41
XV     TERM                                        42
XVI    ASSIGNMENT                                  43
XVII   NOTICE                                      44
XVIII  GOVERNMENT REGULATIONS                      44
XIX    PACIFIC ALASKA LNG ASSOCIATES               45
XX     MISCELLANEOUS                               45
</TABLE>

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                              GAS PURCHASE CONTRACT

      THIS CONTRACT is made and entered into as of this 20th day of December,
1982, by and between Shell oil Company, a Delaware corporation (hereinafter
referred to as "Seller"), and ALASKA PIPELINE COMPANY, an Alaska corporation
(hereinafter referred to as "Buyer");

                                   WITNESSETH:

      WHEREAS, Seller now owns and/or controls an interest in certain oil, gas
and mineral leases in the Beluga Gas Field area, Cook inlet, Alaska; and

      WHEREAS, Buyer is engaged in the purchase, transmission and sale of
natural gas in the State of Alaska; and

      WHEREAS, the Beluga Field is currently remote from pipeline facilities
necessary to market Buyer's natural gas reserves in the Cook Inlet area; and

      WHEREAS, Buyer is willing to construct and operate a new pipeline system
to transport natural gas from the Beluga Gas Field; and

      WHEREAS, Seller desires to deliver and sell to Buyer and Buyer desires to
receive and purchase from Seller certain natural gas upon the terms and
conditions herein set forth;

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      NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, paid by Buyer to Seller, the
receipt and sufficiency of which are hereby acknowledged, and of the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:

ARTICLE I: DEFINITIONS

      Except where the context otherwise indicates another or different meaning
      or intent, the following terms are intended and used herein and in Exhibit
      A and shall be construed to have the meanings as follows:

      1.1   The term "day" shall mean a period of twenty-four (24) consecutive
            hours beginning and ending at 8:00 A.M. Alaska Standard Time.

      1.2   The term "month" shall mean a period beginning at 8:00 A.M. on the
            first day of the calendar month and ending at 8:00 A.M. on the first
            day of the next succeeding calendar month.

      1.3   The term "contract year" shall mean any period of twelve (12)
            consecutive calendar months during the life of this contract
            beginning at 8:00 A.M. on the first day of January following the
            date of initial delivery of gas hereunder and any anniversary of
            such date during the term hereof.

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      1.4   The "initial period" shall mean the period beginning on the first
            day of delivery and ending at 8:00 A.M. on the start of the first
            contract year.

      1.5   The term "calendar year" shall mean a period of twelve (12)
            consecutive months beginning on the first day of January of any
            calendar year.

      1.6   The term "gas" shall mean natural gas meeting the standards set
            forth in Article VI hereof.

      1.7   The term "cubic foot of gas" means the volume of gas contained in
            one cubic foot of space at a standard pressure base of fourteen and
            sixty-five one-hundredths (14.65) pounds per square inch absolute
            and a standard temperature base of sixty degrees Fahrenheit
            (60(degree) F.). For the purposes of measurement, calculations and
            meter calibrations, the atmospheric pressure shall be assumed to be
            fourteen point seven (14.7) pounds per square inch absolute.
            Temperature shall be determined by a recording thermometer
            continuously used and installed by Buyer so as to record properly
            the temperature of the gas being metered, and specific gravity shall
            be determined by Buyer by use of the Acme gravity balance, or, at
            the option of Buyer, by such other tests and instruments as may be
            standard for such purposes in the gas industry.

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      1.8   The term "MCF" shall mean one thousand (1,000) cubic feet of gas.

      1.9   The term "British thermal unit" (Btu) is defined as the amount of
            heat required to raise the temperature of one pound of water from
            fifty-nine degrees Fahrenheit to sixty degrees Fahrenheit at a
            pressure of fourteen and 65/100 pounds per square inch absolute. For
            the purpose of this contract, the Btu content per cubic foot
            ("gross") shall be determined for a cubic foot of gas at a
            temperature of sixty degrees Fahrenheit (60(degree) F.) when
            saturated with water vapor and at an absolute pressure equivalent to
            thirty inches (30") of mercury at thirty-two degrees Fahrenheit
            (32(degree) F.) when the products of combustion are cooled to the
            initial temperature of gas and air and when the water formed by
            combustion is condensed to the liquid state.

      1.10  The term "contract area" means the area described in the schedule
            attached hereto as Exhibit A and made a part hereof and as shown on
            the plat attached hereto as Exhibit B and made a part hereof.

      1.11  The term "daily deliverability" shall mean that quantity of gas
            which Seller has available to Buyer during each day from the
            contract area when

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            Seller's wells and facilities are produced and operated at the
            maximum efficient rate of flow determined by Seller, or the rate
            permitted by applicable orders, rules, regulations or laws,
            whichever is the lesser amount.

      1.12  The term "price" shall mean the price to be paid by Buyer to Seller
            for gas delivered to Buyer hereunder as provided for in Article VII
            hereof.

      1.13  The term "annual contract quantity" or "ACQ" shall mean the quantity
            of gas which Seller agrees to sell and deliver to Buyer and Buyer
            agrees to take and pay for, or pay for if available whether taken or
            not, during each contract year during the term hereof.

      1.14  The term "average daily contract quantity" shall mean one/365th or
            the annual contract quantity committed by Buyer to Seller hereunder.

      1.15  The "term of this contract" shall mean the period during which this
            Gas Purchase Contract shall remain in full force and effect as
            provided for in Article XV hereof.

      1.16  The term "swing rate" means the maximum obligation of Seller to
            deliver gas in millions of cubic feet per day.

      1.17  The term "swing factor" means the relationship between the swing
            rate and the average daily con-

                                       -5-
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            tract quantity.

                  For example, 20 billion cubic feet per year annual contract
                  quantity divided by 365 is 55 million cubic feet per day; and
                  110 million CFD swing rate (E.G.), divided by this million
                  CFD, is a swing factor of 2.0.

      1.18  The term "Seller's gas" shall mean Seller's entire interest in
            natural gas contained in sands underlying the contract area,
            presently developed or developed during the term of this contract
            less gas previously committed under sales contracts to others as
            reserved pursuant to Article IV hereof.

ARTICLE II; POINT OF DELIVERY, CONSTRUCTION OF FACILITIES, OWNERSHIP AND CONTROL
            OF GAS

      2.1   The point of delivery for all gas to be purchased hereunder shall be
            at the inlet flanges of Buyer's or its designee's central meter
            station to be located at a mutually agreeable point in the contract
            area. Seller will construct, at its sole expense, the gathering
            pipeline and other facilities required to deliver the gas produced
            to the point of delivery.

      2.2   Seller shall, to the extent Seller has the right to do so, furnish
            to Buyer, at no expense to Buy-

                                       -6-
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            er, a suitable site at the point of delivery, together with the
            right of ingress and egress, to be used by Buyer for Buyer's or its
            designee's measuring and other equipment. All property of Buyer
            placed on or under the property of Seller shall, insofar as Seller
            is concerned, be deemed the personal property of Buyer whether or
            not affixed to the realty, and shall at all times be subject to the
            absolute control and disposition of Buyer. Seller, to the extent
            that Seller has the right to do so, hereby grants to Buyer a
            right-of-way and easement on and over the various leases within the
            contract area together with the right of ingress and egress, for the
            construction, maintenance, operation, repair and removal of the
            pipelines, measuring stations, and any other facilities which may be
            installed by Buyer or its designee in order to receive and transport
            the gas delivered hereunder.

      2.3   Title to all gas purchased hereunder shall pass from Seller to Buyer
            at the point of delivery. As between the parties hereto, Seller
            shall be in control and possession of the gas deliverable hereunder
            and responsible for any loss of such gas or for any damage or injury
            caused thereby until the same shall have been delivered to Buyer at
            the point of delivery, after which delivery Buyer

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            shall be deemed to be in control and possession thereof and
            responsible for any loss of such gas or for any injury or damage
            caused thereby.

ARTICLE III: PRESSURE

      3.1   The gas delivered hereunder at the point of delivery shall be
            delivered into Buyer's facilities at the pressure existing therein
            from time to time but not in excess of one thousand (1,000) pounds
            per square inch gauge. Seller agrees to continue deliveries at such
            pressure so long as such pressure is naturally available but when
            the natural well pressures decline Seller shall not be required to
            deliver such gas in excess of natural well pressures.

      3.2   Should it become necessary to install compression facilities in
            order to deliver gas hereunder, Seller agrees to install such
            facilities and operate same if in the sole judgment of Seller it is
            economical and desirable for Seller to do so. In the event Seller
            elects not to install and operate such facilities, it shall so
            advise Buyer; then Buyer shall for a period of ninety (90) days have
            the right and option to elect to do so or cause same to be done. If
            Buyer so elects to install

                                       -8-
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            and operate, or cause to be installed and operated such compression
            facilities, then Seller agrees that Buyer shall have the right to
            deduct each month as a compression fee, from the proceeds due and
            payable to Seller hereunder, Buyer's out-of-pocket cost and expenses
            incurred in the acquisition, installation and operation of such
            facilities (including but not limited to the value of Buyer's
            equipment utilized and labor costs, including fringe benefits). The
            amount to be deducted each month and any terms and conditions
            pertaining thereto shall be set forth in a letter agreement executed
            by and between Buyer and Seller at the time Buyer elects to install
            and operate, or cause to be installed and operated, such compression
            facilities. In the event neither party elects to install compression
            facilities, then Seller may terminate this contract by written
            notice to Buyer.

ARTICLE IV; RESERVATIONS OF SELLER

      4.1   Seller reserves from this contract such quantities of Seller's gas
            as are required for the development, operation and maintenance of
            Seller's leasehold interests within the contract area, such
            quantities as are necessary to fulfill Seller's obligations to
            deliver gas to the lessors and such

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            quantities as are subject to contracts executed prior to this
            contract.

      4.2   Seller may process the gas delivered hereunder either prior to the
            point of delivery or downstream from the point of delivery for the
            extraction of liquefiable hydrocarbons at a mutually agreeable point
            in the contract area. Such processing shall be for the recovery of
            liquefiable hydrocarbons, other than methane (except such methane
            unavoidably removed in such processing). Seller shall not subject
            such gas to any process or operation which will cause such gas to
            fail to meet the applicable specifications as to quality contained
            in this contract. The fuel, shrinkage and all other losses
            attributable to and resulting from such processing shall be borne by
            Seller. When such gas is processed downstream from the point of
            delivery, Seller's plant volume (as used herein meaning fuel,
            shrinkage and all other losses attributable to such processing)
            which is attributable to the gas delivered hereunder shall be
            subtracted from the volumes delivered for sale hereunder at the
            point of delivery, and the net volume thus obtained shall be used
            for the purposes of computing Buyer's payments for gas purchased
            hereunder.

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<PAGE>

ARTICLE V: QUANTITY

      5.1.1 During the term of this contract, Buyer shall have the right to take
            and purchase, if available, and Seller shall make its best efforts
            to sell and deliver or cause to be delivered to Buyer, the following
            quantities of gas:

<TABLE>
<CAPTION>
       Annual Contract
       Quantity (ACQ)                       Swing Rate
Year       (MMMcf)        Swing Factor    (MMcf per day)
----   ---------------   --------------   --------------
<S>    <C>               <C>              <C>
1985           0         Not Applicable         25
1986           5               2.0              25
1987          10               2.0              50
1988          10               2.0              50
1989          15               2.0              80
1990          15               2.0              80
1991          20               2.0             110
1992          20               2.0             110
1993          20               2.0             110
1994          20               2.0             110
1995          20               2.0             110
1996          15               2.0              80
1997          15               2.0              80
1998          15               2.0              80
1999          10               2.0              50
2000          10               2.0              50
</TABLE>

      5.1.2 Premium Deliverability

            Buyer may request Seller to increase the swing rate (swing factor)
            tabulated above, said increase to be known as "premium
            deliverability". Seller shall thereafter have six (6) months to
            respond

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            to Buyer regarding Seller's ability and intent to meet Buyer's
            request for said premium deliverability, said response by Seller to
            be at Seller's sole option. If Seller's said response results in
            swing rate(s) sufficient to produce a swing factor of 2.5 or more as
            requested by Buyer, then from the first day of the month following
            an effective swing rate of 2.5 or more, Buyer shall, so long as the
            swing rate remains at 2.5 or more, pay Seller a premium
            deliverability fee of 35 cents per MCF applicable to all gas
            delivered. Said premium deliverability fee shall be adjusted by the
            same factor as the base price given per paragraph 7.2(a) of Article
            VII hereof.

      5.2.1 Relief by Loss of Market

            Seller recognizes that Buyer's ability to meet the annual contract
            quantity is limited to demands for gas made on Buyer by Buyer's
            customers and that if said customers discontinue or reduce their
            demands for Buyer's gas as a result of obtaining increased
            quantities of gas from any source other than Buyer, then to the
            extent of said increased quantities Buyer shall be relieved of its
            annual contract quantity obligation to Seller and the total contract
            quantity will be reduced by an amount equal to the sum of said
            reductions in contract quantities. In such event, Seller's
            obligation

                                      -12-
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            of swing rate shall be proportionally reduced simultaneously.

      5.2.2 Seller recognizes that Buyer's ability to meet the annual contract
            quantity is limited to demands for gas made on Buyer by increased
            demand(s) by Buyer's customers and that if such customers projected
            demand(s) fail to materialize, then undue hardship will result as to
            Buyer. Therefore, notwithstanding any other provisions of this
            Agreement, if, in its sole discretion, Buyer determines at any time
            and from time to time that Buyer cannot market some or all of the
            gas to be delivered hereunder at the annual contract quantity or
            quantities provided for herein, Buyer shall so notify Seller in
            writing, no later than April 1 of any contract year, identifying the
            lower annual contract quantity(s) (but such reduction not to be in
            excess of thirty percent (30%) of the annual contract quantity(s))
            which Buyer projects it will be able to market during the following
            contract year(s). As of January 1 of the following contract year the
            annual contract quantity(s)shall be the lower annual contract
            quantity(s) as set forth in the hereinabove mentioned notice from
            Buyer; provided, however, in consideration of the relief provided by
            Seller to Buyer, Buyer agrees to pay to Seller a premium on

                                      -13-
<PAGE>

            the then applicable gas price, including any premium deliverability
            fee in effect, as determined by Article VII applicable to all gas
            delivered, as follows:

<TABLE>
<CAPTION>
If the Annual Contract    The Applicable price
 Quantity is Reduced         per MCF Shall
From                TO      be increased by
----                --    --------------------
<S>                 <C>   <C>
 0%                 10%           5.6%
11%                 20%          12.5%
21%                 30%          21.4%
</TABLE>

            Thereafter, the total contract quantity will be reduced by an amount
            equal to such lower contract quantity or quantities, and Seller may
            commit and deliver such quantity(s) to any other purchaser,
            provided, however, as to the quantity(s) of gas sales made to
            another party or parties by Seller, Buyer shall be proportionally
            relieved of paying the premium hereinabove stated for each MCF sold.

            If Seller has not committed such quantity(s) to another purchaser,
            Seller shall have the right and option to extend the term of this
            Agreement by recommitting such quantity(s), including a swing factor
            of 1.33, to Buyer, otherwise upon the same terms and conditions set
            forth herein, provided

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<PAGE>

            Seller gives Buyer written notice three (3) years prior to end of
            the term of this Agreement.

            If Buyer elects to reduce the annual contract quantity under this
            option, and if during the period of such reduced contract quantity
            Buyer purchases gas from any other producer(s) at the Beluga Unit at
            a price higher than the price then payable to Seller hereunder, then
            Buyer shall pay Seller such higher price during said period.

            In the event Buyer elects to reduce the annual contract quantity as
            set forth hereinabove, Buyer agrees to take gas from Seller ratably
            insofar as possible, based on deliverability, with all others
            supplying gas to Buyer during such period(s).

      5.3   Pre-construction Deliveries of Gas

            The parties to this agreement recognize that an imminent demand for
            gas may exist or develop for which neither Seller nor Buyer is
            prepared to make delivery immediately on demand through facilities
            owned outright by either Seller or Buyer. It is agreed that Buyer
            will proceed diligently to negotiate to supply said demand by
            deliveries of

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<PAGE>

            gas owned and through facilities owned by Seller in part and in part
            by others. To the extent of Seller's ability to do so, Seller will
            make available to Buyer its share of spare delivery capacity
            (production) at these existing facilities so that Buyer can offer
            said spare delivery capacity to supply said demand pending
            completion by Seller of its own facilities and the commencing of
            deliveries therethrough to Buyer. Buyer will simultaneously
            negotiate with the other owners of said gas and facilities to
            utilize their spare delivery capacity similarly to supply said
            imminent demand, it being intended by both Buyer and Seller that
            immediately upon Seller's completion of its own delivery capacity,
            Buyer would terminate its purchases from said other owners of gas
            and facilities and commence taking Seller's gas only to supply said
            imminent demand for gas.

            During the period until January 1, 1986 no annual contract quantity
            shall apply to Buyer's taking of gas under this Article 5.3, and no
            swing rate and no swing factor shall be in effect, but Seller will
            develop a swing rate of 25 MMCF per day with all due diligence, by
            January 1, 1984 if practicable with prudent practice.

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<PAGE>

            Buyer's takes of gas from Seller as contemplated above in this
            Article 5.3, and as may be further accomplished into Buyer's own
            facilities prior to January 1, 1986, shall together count toward
            Buyer's annual contract quantity obligation to which commences at
            January 1, 1986, and Buyer shall be relieved of its annual contract
            quantity obligation to Seller until such time as a deficiency of
            annual contract quantity takes of gas may exist in excess of the
            amounts so taken by Buyer from Seller prior to January 1, 1986.

      5.4   Relief by Taking of Royalty Gas in Kind

            The annual contract quantities and the swing rates set forth in
            Paragraph 1 of Article V hereof shall be reduced whenever and to the
            extent that any lessor or lessors within the contract area shall
            exercise partially or wholly any right to take their shares of
            royalty gas (attributable to Seller's leaseholds in the contract
            area) in kind. Should any such lessor deliver such royalty gas to
            Buyer or to any of Buyer's affiliated companies, then for the
            purpose of annual contract quantities and the swing rate hereunder
            such royalty gas shall be deemed delivered hereunder.

      5.5   Seller shall, with due diligence, operate the lands and leaseholds
            subject to this contract in a skillful and prudent manner to the end
            that

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<PAGE>

            Seller's delivery capacity to Buyer shall be maintained during the
            term hereof at a rate equal to the swing rate set forth in Paragraph
            5.1 of Article V hereof; provided, however, in the event Seller
            should at any time during a period of peak demand (normally winter
            time) in a contract year fail or be unable to develop, or having
            developed fail to maintain during a period in excess of 120 days,
            the delivery capacity necessary to deliver to Buyer the swing rate
            then in effect, the annual contract quantity shall be reduced by
            1.25 times the percentage by which Seller's demonstrated delivery
            capacity as established by Article V, Paragraph 5.5 is below the
            swing rate then in effect. In the event there is an increase in
            Seller's demonstrated delivery capacity as defined in Paragraph 5.5
            of Article V subsequent to the reduction of the annual contract
            quantity as provided above, then from the first day of the month
            following such increase (pro rated for any partial year), and for
            subsequent calendar years, the annual contract quantity shall be
            increased by the percentage by which Seller's demonstrated delivery
            capacity shall have increased above the previously determined
            delivery capacity which caused the reduction of annual contract
            quantity, but in no event to more than the annual contract quantity

                                      -18-
<PAGE>

            set forth in paragraph 5.1 of Article V hereof for such year,
            subject to Buyer's prior written acceptance of such increase at
            Buyer's sole option, provided Buyer has contracted with a third
            party to replace gas lost due to the lack of Seller's delivery
            capacity. In determining the annual quantities of gas Buyer is
            required to take or pay Seller for, whether taken or not, during any
            year by reason of change in Seller's delivery capacity, the annual
            contract quantity for any year shall be computed by prorating the
            several values of the annual contract quantity on the basis of the
            portion of the year each such value was in effect.

      5.6   As soon as practicable after deliveries of gas have commenced and
            stabilized, the delivery capacity of Seller's gas wells shall be
            determined during a mutually agreeable consecutive three (3) day
            deliverability test. Seller's delivery capacity shall be the average
            daily quantities of gas delivered to Buyer attributable to Seller's
            interest in the lease(s) during said three (3) day test.

      5.7   At any time but no more often than once in any twelve (12) month
            period, except at Seller's option, Seller's delivery capacity
            (demonstrated capacity) may be redetermined upon request by either
            party by actual measurements and calcula-

                                      -19-
<PAGE>

            tions and shall be estimated or calculated for each month in the
            months in which no actual tests are made using the result of the
            last actual test, if any, as the basis of the estimation. Each test
            will be for a period of three (3) consecutive days, during which
            time the wells will be produced at the maximum efficient rate of
            flow as determined by Seller against the pressures provided for in
            Article III hereof or under such other conditions as determined by
            mutual agreement of the parties and the delivery capacity shall be
            the average daily quantities of gas delivered to Buyer during said
            three (3) day test.

      5.8   Buyer shall use its best efforts to keep Seller informed as to any
            peak demand that may occur during a period other than a normal peak
            demand period to the end that Seller can more expeditiously schedule
            any well workover(s) that Seller believes necessary.

      5.9   It is understood and agreed that nothing in this Agreement shall be
            construed to require Seller to produce and deliver or Buyer to
            purchase and receive from Seller or pay Seller for any quantities of
            gas in excess of that which may be produced under the applicable
            rules, regulations and orders of regulatory bodies having
            jurisdiction. It is expressly understood that Buyer shall have the

                                      -20-
<PAGE>

            right and option to purchase at any time and from time to time such
            daily quantity of gas as it desires up to the swing rate then in
            effect and, in addition, such daily quantities of gas, if any, in
            excess of the swing rate then in effect which in Seller's sole
            judgment can be produced and delivered from Seller's lands and
            leaseholds efficiently and in accordance with good operating
            practices and without impairment of Seller's obligations under prior
            contracts. It is recognized that Seller is not obligated to provide
            facilities to meet the quality specifications set forth in Article
            VI for quantities of gas in excess of the swing rate in effect from
            time to time, and therefore any additional gas which Buyer may elect
            to receive under this Paragraph, which is in excess of the capacity
            of Seller's facilities as then installed, may be bypassed around
            such facilities and the quality specifications of Article X shall
            not apply to such excess quantity. The taking by Buyer of such
            bypassed gas shall be at Buyer's sole risk.

      5.10  In the event Buyer is required by the provisions of this agreement
            to pay Seller for a quantity of gas which Buyer shall not have
            actually taken during any year of the term hereof, then during the 5
            years next succeeding the year in which Buyer

                                      -21-
<PAGE>

            has failed to take the gas so paid for, all gas taken by Buyer from
            Seller which is in excess of the annual contract quantity for the
            current year shall be known as make-up gas and shall be delivered
            without charge to Buyer until such excess equals the amount of gas
            previously paid for but not taken; provided, however, Buyer will pay
            Seller any price differential between that price previously paid and
            that price in effect when such make-up gas is actually taken. In the
            event Buyer has not by the end of the term of this agreement made up
            all gas paid for but not taken, then Seller shall refund, without
            interest, monies to Buyer for that portion of the gas volumes paid
            for but not taken which Seller is unable to deliver as a result of
            Seller's wells not being capable of producing all of such volumes as
            Make-up Gas when produced at their delivery capacity throughout the
            remaining term following the year in which Buyer has failed to take
            the gas so paid for; provided, however, in lieu of paying such
            refund, Seller shall have the right and option to extend the term of
            this Agreement for a period of time which is sufficient to enable
            Buyer to receive the volumes paid for but not received.

                                      -22-
<PAGE>

ARTICLE VI: QUALITY

      6.1   Seller agrees that:

            (a) The gas delivered hereunder shall have a total heating value of
            not less than nine hundred fifty (950) Btus per cubic foot or more
            than one thousand fifty (1,050) Btus per cubic foot. If at any time
            Seller shall become unable to produce gas possessing at least such
            total heating value, Buyer shall have the option from time to time
            to refuse to accept that part of Seller's gas which is deficient so
            long as said heating value remains below nine hundred fifty (950)
            Btus per cubic foot In the event Buyer accepts delivery of said gas
            when the heating value thereof is below nine hundred fifty (950)
            Btus per cubic foot, Buyer may reduce the total amount payable as
            the purchase price for gas delivered under this contract for each
            month during which such deficiency exists by an amount determined by
            multiplying such total amount by a fraction having as its numerator
            the average deficiency of British thermal units per cubic foot of
            gas below nine hundred fifty (950) and its denominator nine hundred
            fifty (950). If Buyer shall refuse, pursuant to the foregoing, to
            accept any percentage of Seller's gas, then Seller's obligations to
            deliver Seller's gas hereunder shall be reduced by a similar
            percentage.

                                      -23-
<PAGE>

            If Buyer shall refuse, pursuant to the foregoing, to accept any of
            Seller's gas for a period of thirty (30) days, then Seller, as to
            such volume of refused gas, may terminate this contract by written
            notice to Buyer.

            (b) Buyer shall have the right to determine, at such time or times
            as it may desire, the total heating value of the gas in Btus per
            cubic foot by means of some approved method of general use in the
            industry and on the standard set forth in Paragraph 1.8 hereof.
            Buyer shall give to Seller notice of the time of all tests for
            determining the BTU content of the gas to be conducted by such party
            reasonably in advance of making the test in order that the other
            party may conveniently have its representative present. Should there
            be any material variance between tests by Buyer and Seller, a joint
            test will be run and will be controlling, effective from the first
            day of the calendar month preceding such joint test.

      6.2   Seller agrees that Buyer may refuse to accept any gas hereunder
            which:

            (a) Shall contain more than one (1) grain of hydrogen sulphide per
            one hundred (100) cubic feet of gas as determined by the Tutwiler
            test or some other quantitative test, mutually agreeable to the
            parties hereto, after the presence of hydrogen

                                      -24-
<PAGE>

            sulphide has been indicated by qualitative test;

            (b) Shall contain more than twenty (20) grains of total sulphur per
            one hundred (100) cubic feet of gas;

            (c) Shall contain in excess of:

                  (i)   Three percent (3%) by volume of carbon dioxide;

                  (ii)  One percent (1%) by volume of oxygen;

            (d)   Shall have a temperature of more than one hundred twenty
                  degrees Fahrenheit (120 degrees F.); or

            (e)   Shall contain more than four (4) pounds of water per one
                  million (1,000,000) cubic feet of gas.

      6.3   In addition to meeting the above specifications, the gas delivered
            hereunder shall be commercially free from dust, gums, gum forming
            constituents, or other liquid or solid matter which might become
            separated from the gas in the course of transportation through
            pipelines.

      6.4   In the event Buyer shall exercise its option to refuse to accept any
            part of Seller's gas not meeting any of the above quality
            specifications, Seller shall be free to sell such rejected gas to
            others. Should Buyer exercise its option to refuse to accept any of
            Seller's gas by reason of

                                      -25-
<PAGE>

            the above quality specifications, then Seller, as to such volume of
            refused gas, may by written notice terminate this contract.

ARTICLE VII: PRICE

      7.1   Subject to the provisions of paragraphs 7.2 and 7.3 below, the base
            price to be paid by Buyer to Seller for gas delivered to Buyer
            hereunder shall be $2.32 per MCF.

      7.2   Subject to the provisions of Paragraph 7.3 below, it is expressly
            understood and agreed between the parties that there shall be an
            adjustment to the price provided for in Paragraph 7.1 above, as
            follows:

            (a)   Annual Price Adjustment:

                  Effective January 1 of each year during the term of this
                  agreement, the base price provided for in Paragraph 7.1 shall
                  be increased or decreased by multiplying it by the following
                  ratio:

                        Posted Price No. 2 Fuel Oil on November 1 preceding
                        date of adjustment
                        ---------------------------------------------------
                        Posted Price No. 2 Fuel Oil on November 1, 1982

                  The term "Posted Price" shall mean the average posted price of
                  No. 2 fuel oil f.o.b., Tesoro Refinery, Nikiski, Alaska. In
                  the event that there ceases to be a posted price for No. 2
                  fuel oil at Tesoro's Refinery at Nikiski, the

                                      -26-
<PAGE>

                  average of the postings for No. 2 fuel oil as published in
                  Platt's Oilgram Price report (or another mutually agreed upon
                  publication in the event Platt's Oilgram discontinues
                  publishing such quotes) f.o.b. Seattle, Washington, shall be
                  substituted in the ratio described above.

            (b)   Taxes:

                  The full amount of any tax or taxes paid by Seller
                  irrespective of the mode or basis of imposition. The term "tax
                  or taxes" as used herein shall mean (i) any tax (other than ad
                  valorem, capital stock, general property or income and excess
                  profit taxes) or (ii) similar charge now or hereafter levied,
                  assessed or made by any governmental or native authority,
                  including any Federal windfall profits taxes, on the gas
                  itself, or on the act, right or privilege or occupation of
                  production, severance, gathering, transportation, sale or
                  delivery of gas which tax is measured by the volume, value,
                  removal price, prevailing value or sales price to Buyer of the
                  gas in question but shall not include any value attributable
                  to the liquid hydrocarbons in said gas that are removed by
                  Seller by processing; provided,

                                      -27-
<PAGE>

                  however, that the term "tax" shall not be deemed to include
                  (i) any processing tax imposed on Seller because of the fact
                  that gas may be processed or handled through or in any plant,
                  or (ii) any general franchise tax imposed on corporations on
                  account of their corporate existence or on their right to do
                  business within the state as a foreign corporation; or (iii)
                  any delinquent interest and penalty that may be attributable
                  to any tax. Taxes or assessments applicable to any royalty,
                  overriding royalty, production payment or similar interest
                  shall be considered to be covered by the provisions hereof to
                  the extent reimbursement made by Buyer to Seller with respect
                  thereto is passed on by Seller to the owner of such royalty,
                  overriding royalty, production payment or similar interest or
                  to the extent Seller has paid such taxes without reimbursement
                  from the owner of such royalty, overriding royalty, production
                  payment or similar interest.

                  The above provisions of this paragraph 7.2(b) notwithstanding,
                  should Seller at any time pay ad valorem mineral rights
                  property taxes

                                      -28-
<PAGE>

                  attributable to gas which Buyer has the right to receive
                  hereunder, Seller will notify Buyer in writing, stating the
                  amount thereof, along with adequate supporting information,
                  and Buyer will, within thirty (30) days after the receipt of
                  such notice from Seller, reimburse Seller in the amount of
                  such taxes. The reimbursement shall be based upon the ratio
                  which the volume of gas Buyer has the right to receive
                  hereunder as of the date of assessment bears to the total
                  volume of gas reserves underlying the properties subject to
                  this agreement as of the assessment date or in the event the
                  lands subject to this agreement are not assessed separately
                  but rather as part of other lands, the reimbursement shall be
                  based upon the ratio which the volume of gas Buyer has the
                  right to receive hereunder as of the date of assessment bears
                  to the total volume of gas reserves underlying all the lands
                  so assessed. Unless the total gas underlying the properties is
                  valued separately for assessment purposes, the amount of the
                  ad valorem mineral rights property taxes assigned to the gas
                  each year shall be that portion of the total tax that the
                  value of the gas bears to the total value of all liquids and
                  gas combined as determined

                                      -29-
<PAGE>
                  by the assessor before applying any depreciation charges,
                  operating costs or present worth factors. The intent of this
                  paragraph is that the Buyer shall pay all ad valorem mineral
                  rights property taxes reasonably attributable to gas which
                  Buyer has the right to receive hereunder, and the amount of
                  such taxes shall be determined in an equitable manner to
                  produce that result. Nothing contained herein shall imply that
                  Buyer has any title to any volume of gas it has the right to
                  receive hereunder. Failure of Seller to notify Buyer, within
                  one (1) year after the due date, of the payment by Seller of
                  any ad valorem mineral rights property taxes on gas which
                  Buyer has the right to receive hereunder shall constitute a
                  waiver by Seller of the reimbursement by Buyer for that
                  particular item, but shall not constitute a waiver of any
                  rights to reimbursement for the payment of such tax for
                  subsequent periods.

                  (c) Excess Royalty Payments - Seller agrees to pay or cause to
                  be paid to the parties entitled thereto all royalties,
                  overriding royalties or like charges against said gas or the
                  value thereof. Buyer agrees to reimburse Seller for all
                  "excess royalty payments" which Seller

                                      -30-
<PAGE>

            shall be required to pay to the State of Alaska, United States of
            America or other royalty owners with respect to gas sold and
            delivered to Buyer hereunder. Such payments shall be made by Buyer
            to Seller within ten (10) days following receipt of statements from
            Seller therefor. The term "excess royalty payments" as used herein
            is defined as the amount by which actual royalty payments by Seller
            to the State of Alaska, United States of America, or other royalty
            owners under the Agreement exceed the amount such payment would have
            been if the royalty value thereunder had been calculated upon the
            sums received by Seller pursuant to this agreement.

      7.3   Notwithstanding the provisions of paragraphs 7.1 above, the price to
            be paid by Buyer to Seller for gas delivered to Buyer hereunder
            shall not exceed the applicable maximum lawful price, and
            adjustments thereto, permitted by FERC, the Congress, the President
            or any other Governmental authority having jurisdiction to establish
            such maximum lawful prices.

ARTICLE VIII. MEASUREMENT

      8.1   Buyer shall measure the gas purchased hereunder by means of
            standard-type equipment known as turbine meters, conforming to the
            requirements of AGA Gas

                                      -31-
<PAGE>

            Measurement Committee Report No. 7, installed in series of two
            identical units at the point of delivery, and the average of the two
            measurements shall be used as the basis for purchases unless either
            Buyer or Seller may show cause to the other that good reason exists
            to choose one or the other of the series measurements to be
            preferable and more accurate pending any necessary repairs or
            adjustments to the questioned measurement. Installation and
            operation and maintenance of said turbine meters shall be done by
            Buyer. Seller may at its option install suitable orifice meter(s)
            also in series with Buyer's turbine meters for purposes of auditing
            the measurement obtained from said turbine meters. Said orifice
            meter(s), if installed, shall be operated and maintained by Seller
            as prescribed by AGA Gas Measurement Committee Report No. 5 or
            subsequent revisions thereof. Buyer and Seller each shall have
            access to the other's measuring equipment at reasonable hours, but
            the reading, calibrating, and adjusting thereof and the changing of
            charts shall be done by the respective owner.

      8.2   At appropriate intervals, the meters and instruments shall be
            calibrated and if in the aggregate they are found to be inaccurate
            by more than one percent (1%), the quantities of gas based on such

                                      -32-
<PAGE>

            registration shall be corrected at the rate of inaccuracy for any
            period which is known or agreed upon. In the event the period of
            inaccuracy is not known or cannot be agreed upon, then such period
            shall be deemed to be thirty (30) days.

ARTICLE IX: AMOUNT OF SELLER'S GAS

      9.1   As soon as is practicable after the date of this agreement, Seller
            shall make available to Buyer all information, material and data
            which Seller has available and does not consider confidential
            concerning Seller's gas.

      9.2   At any time during this contract, but not more often than once each
            year, Seller will, at Buyer's request, furnish to Buyer such
            geological, engineering and production data (except interpretive
            data) available to Seller, without cost to Buyer, as may be needed
            for an independent determination of gas reserves and deliverability
            thereof. Such data shall include any and all information pertaining
            to Seller's wells,including but not limited to pressure data.

      9.3   Determinations of the amount of Seller's gas not yet produced shall
            be made by Seller and Buyer upon the written request by Buyer, but
            in no event sooner than one (1) year after the date of the last
            determination. The effective date for any

                                      -33-
<PAGE>

            redetermination of the amount of Seller's gas not yet produced shall
            be the last day of the month following the date of notice by Buyer
            for such redetermination. Buyer's reliance upon any such
            determination or redetermination shall be at its sole risk.

      9.4   If, as a result of a determination made subsequent to January 1,
            1993 of the amount of Seller's gas not then produced, it is
            determined that the amount of Seller's gas on the date of this
            agreement was less than two hundred twenty million (220,000,000)
            Mcf, plus the undelivered portion of the delivery obligations
            contained in any such other contracts as Seller may enter into
            pursuant to Paragraphs 9.5 of this Article IX, then the annual
            contract quantities, swing factors and swing rates set forth in
            Paragraph 5.1 of Article V hereof remaining on the effective date
            for such determination shall be adjusted as of such date by
            multiplying said quantities, factors and rates by a fraction the
            numerator of which is the amount of Seller's gas not yet produced as
            so determined, expressed in MCF, and the denominator of which is two
            hundred twenty million (220,000,000) MCF plus the undelivered
            portion of any delivery obligations contained in any such other
            contracts.

                                      -34-
<PAGE>

      9.5   Seller shall have the right and option during the term hereof, at
            any time or times, to sell and deliver Seller's gas to any new gas
            purchaser or purchasers, or to increase sales to existing gas
            purchasers, provided, however, said Seller's gas that is to be sold
            is not needed to meet its obligations to Buyer hereunder. In
            reaching its decision for such additional sales, Seller agrees that
            it will not on or after the date hereof enter into a contract or
            contracts for the sale of Seller's gas which obligates Seller to
            deliver any Seller's gas which would reduce the quantity of Seller's
            gas to an extent that the total gas available to Buyer under this
            agreement would be less than two hundred twenty million
            (220,000,000) Mcf. In addition, Seller will provide in the sales
            contract with said gas purchasers that if any future determination
            of the amount of Seller's gas not yet produced, together with the
            amount of prior deliveries under this contract, is found to be less
            than 220,000,000 Mcf plus the amount of gas sold in such new
            contract or contracts, the purchaser(s) of said gas shall deduct
            from the quantities to be purchased such amounts as are required to
            enable Buyer to purchase a total of 220,000,000 Mcf hereunder.

      9.6   Buyer will, subject to all the terms, conditions, reservations and
            limitations set forth in this

                                      -35-
<PAGE>

            agreement, accept from Seller during the term hereof a total
            quantity of gas up to but not in excess of two hundred twenty
            million (220,000,000) MCF, which can be produced and delivered from
            the lands and leaseholds described in Exhibit "A". Seller, however,
            reserves the right, in its sole discretion, to deliver gas from
            lands and leaseholds other than those described in said Exhibit "A"
            without in any way enlarging its delivery obligations hereunder.

ARTICLE X: WARRANTY OF TITLE

      10.1  This contract embraces one hundred percent (100%) of the gas
            delivered and purchased hereunder and Seller warrants that it has
            full and unqualified title and authority to sell such gas to Buyer
            upon the terms and conditions herein specified. Buyer shall pay
            Seller for one hundred percent (100%) of all gas sold and delivered
            to Buyer hereunder, and Seller shall pay the royalty owners, the
            other owners of the working interest and all other persons, if any,
            owning an interest in such gas the proportionate part due each of
            them for and with respect to the sale of such gas. Seller agrees to
            indemnify and hold Buyer harmless from and against any and all
            claims arising out of the wrongful payment of or failure to pay any
            owner of an interest in such gas, and against all suits,

                                      -36-
<PAGE>

            actions, debts, accounts, damages, costs, losses and expenses
            arising from or out of any adverse claims to or against such gas or
            any interest therein or in the value thereof. Seller further agrees
            to warrant and forever defend unto Buyer the title to all gas
            delivered to Buyer hereunder, and warrants that such gas is free
            from any and all liens, charges, adverse claims and encumbrances at
            the point and time of delivery of such gas to Buyer hereunder.

ARTICLE XI: BILLING AND PAYMENT

      11.1  On or before the last day of each calendar month after the month of
            initial delivery of gas hereunder, Buyer agrees to account and make
            payment to Seller for all gas received by Buyer during the preceding
            calendar month or billing period. Payments are to be based on gas
            purchased by Buyer at its measuring station at the point of delivery
            during the applicable billing period.

      11.2  If Buyer shall fail in any year during the term hereof to take the
            Annual Contract Quantity, then Seller shall, within sixty (60) days
            after the end of such year, render a bill to Buyer for the amount of
            the deficiency based on the average price paid for gas delivered
            hereunder during the last month of the year in which such deficiency

                                      -37-
<PAGE>

            occurred. In computing the amount due Seller for any deficiency in
            takings by Buyer occurring during any year, the following quantities
            shall be deducted from such deficiency:

            (a)   The total of the daily quantities of gas which Buyer requests
                  (up to and including the Swing Rate) and which Seller fails to
                  deliver on any day or days during such year.

            (b)   The total of the quantities of gas not included in (a) above
                  which Buyer is unable to take on any day or days during such
                  year by reason of force majeure or for failure to meet the
                  quality requirements of Article X.

            Buyer agrees to make full payment for the full amount for such
            deficiency within fifteen (15) days after receipt of such bill.

ARTICLE XII: TAXES

      12.1  Subject to reimbursement as provided in this agreement, Seller shall
            pay all gross production, severance and other taxes now or hereafter
            required by law to be paid to governmental authorities with respect
            to the production or other handling of gas at any point upstream
            from the point of delivery.

                                      -38-
<PAGE>

ARTICLE XIII: FORCE MAJEURE

      13.1  If any party is rendered unable, wholly or in part, by force majeure
            or other causes herein specified, to carry out its obligations under
            this contract, then upon such party's giving notice and reasonably
            full particulars of such force majeure in writing or by telegraph to
            the other party within a reasonable time after the occurrence of the
            cause relied on, the obligations of the party giving such notice, so
            far as they are affected by such force majeure or other causes
            herein specified, shall be suspended during the continuance of such
            cause, but for no longer period, and such cause shall be remedied so
            far as possible with all reasonable dispatch.

      13.2  The term "force majeure" as employed herein means acts of God;
            strikes, lockouts or other industrial disturbances (including an
            event of force majeure which causes a major customer of Buyer to
            interrupt its gas purchases); acts of the public enemy; wars;
            blockades; insurrections; riots; epidemics; landslides; lightning;
            earthquakes; fires; storms; floods; washouts; arrests and restraints
            of the government, either federal or state, civil or military; civil
            disturbances; explosions; breakage; breakdown or accident to
            machinery, equipment or lines of pipe; the necessity or desirability
            of

                                      -39-
<PAGE>

            repairing, altering, maintaining, inspecting, replacing, changing
            the size of, substituting or removing machinery, equipment,
            pipelines or appurtenant facilities; and any other causes, whether
            of the kind herein enumerated or otherwise, not reasonably within
            the control of the party claiming suspension, and which by the
            exercise of due diligence such party is unable, wholly or in part,
            to prevent or overcome. Such term likewise includes (i) in those
            instances where either party hereto is required to obtain
            servitudes, right-of-way grants, permits, exceptions or licenses to
            enable such party to fulfill its obligation hereunder, the inability
            of such party to acquire, or the delays on the part of such party in
            acquiring, at reasonable cost and after the exercise of reasonable
            diligence, such servitudes, right-of-way grants, permits, exceptions
            or licenses, and (ii) in those instances where either party hereto
            is required to furnish materials and supplies for the purpose of
            constructing or maintaining facilities or is required to secure
            permits or permission from any governmental agency (federal, state
            or municipal, civil or military) to enable such party to fulfill its
            obligations hereunder, the inability of such party to acquire, or
            the delays on the part of such

                                      -40-
<PAGE>

            party in acquiring, at reasonable cost and after the exercise of
            reasonable diligence, such material and supplies, permits and
            permissions. 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 the demands of the opposing party when such
            cause is inadvisable in the discretion of the party having the
            difficulty.

      13.3  In the event Buyer invokes force majeure hereunder, Buyer agrees to
            take gas from Seller ratably insofar as possible, based on
            deliverability, with all others supplying gas to Buyer during such
            periods of force majeure.

ARTICLE XIV: DEFAULT AND TERMINATION

      14.1  If either party hereto shall fail to perform any of the covenants or
            obligations imposed upon it under and by virtue of this agreement,
            the other party hereto, in addition to any and all other remedies
            which it may have, may at its option terminate this agreement by
            proceeding as follows: The party not in default shall cause a
            written notice to be served on the party in default, stating
            specifically the cause for termi-

                                      -41-
<PAGE>

            nating this agreement and declaring it to be the intention of the
            party giving notice to terminate the same; whereupon the party in
            default shall have sixty (60) days after the service of the
            aforesaid notice in which to remedy, remove or take all appropriate
            action to remedy or remove the cause or causes stated in the notice
            for terminating this agreement, and if, within said period of sixty
            (60) days, the party in default does so remedy or take all
            appropriate action to undertake to remedy or remove said cause or
            causes and fully protect, defend and indemnify the party not in
            default for any and all consequences of such breach, then such
            notice shall be withdrawn and this agreement shall continue in full
            force and effect. In case the party in default does not so remedy,
            remove or take all appropriate action to undertake to remedy or
            remove the cause or causes and does not indemnify the party giving
            the notice from any and all consequences of such breach within said
            period of sixty (60) days, this agreement, at the option of the
            party giving the notice, shall terminate upon the expiration of said
            period.

ARTICLE XV: TERM

      15.1  The term of this contract shall commence on the date of initial
            delivery of gas hereunder and

                                      -42-
<PAGE>

            shall continue thereafter in force and effect for a period of
            fifteen (15) years or longer as may be required under Article V
            hereof to enable Buyer to receive gas which has not theretofore been
            available to Buyer from Seller, as provided in Article V hereof.

ARTICLE XVI: ASSIGNMENT

      16.1  The terms and provisions of this contract shall extend to and be
            binding upon the parties hereto, their respective successors and
            assigns, provided, however, that no change in ownership or change
            in any right to receive payment hereunder with respect to Seller's
            leases, wells or the gas produced therefrom shall be binding upon
            Buyer until the first (1st) day of the calendar month next following
            the date upon which Buyer shall have been furnished with certified
            copies of recorded instruments and other proper and sufficient
            evidence supporting and defining such change, without regard to
            whether Buyer has had previous notice or knowledge thereof.

      16.2  Seller agrees to indemnify, defend and hold harmless Buyer against
            any claim, action, suit or demand by any transferee or mortgagee of
            Seller which contends or alleges that the lands described on
            Exhibit A are not subject to this contract.

                                      -43-
<PAGE>

ARTICLE XVII: NOTICE

      17.1  Any notice, request, demand or statement provided for in this
            contract shall be in writing and shall be deemed delivered seven (7)
            days after the postmarked date when mailed by registered or
            certified mail to the post office address of each of the parties
            hereto as follows:

            BUYER:  Alaska Pipeline Company
                    P. O. Box 6288
                    3000 Spenard Road
                    Anchorage, Alaska 99502
                    Attention:  President

            SELLER: Shell Oil Company
                    Attention:  Natural Gas
                    P. O. Box 576
                    Houston, Texas  77001

            or at such address as Seller or Buyer shall from time to time
            designate by letter properly addressed.

ARTICLE XVIII: GOVERNMENT REGULATIONS

      18.1  This contract and each provision hereof shall be subject to all
            valid applicable federal and state laws and to all present and
            future valid orders, rules and regulations of any duly constituted
            regulatory body of the Federal Government, the State of Alaska or
            any other authority having jurisdiction hereof.

      18.2  Buyer shall promptly undertake to obtain an initial determination
            by the Alaska Public Utilities

                                      -44-
<PAGE>

            Commission that the costs incurred by Buyer hereunder constitute
            reasonable and recoverable costs of Buyer's public utility business.
            In the event that within ninety (90) days from the date of this
            contract such determination is refused, then Buyer or Seller may by
            written notice terminate this contract.

ARTICLE XIX: PACIFIC ALASKA LNG ASSOCIATES

      19.1  Seller herein shall cancel that certain Agreement entitled "Gas Sale
            and Purchase Agreement" dated July 11, 1977 between itself and
            Pacific Alaska LNG Associates concurrently with the execution of
            this Contract. Notice shall be by Certified Mail, return receipt
            requested.

ARTICLE XX: MISCELLANEOUS

      20.1  Each party shall promptly furnish to the other party copies of any
            and all notices, determinations, orders, documents, applications and
            forms filed or received with or from the Federal Energy Regulatory
            Commission and with or from the Public Utilities Commission of
            Alaska relative to the gas, wells and leases in the contract area.

      20.2  This contract was prepared jointly by the parties hereto and not by
            either to the exclusion of the other.

                                      -45-
<PAGE>

      20.3  The failure of either party to insist upon strict performance of any
            provision hereof shall not constitute a waiver of, or estoppel
            against asserting, the right to require such performance in the
            future, nor shall a waiver or estoppel in any one instance
            constitute a waiver or estoppel with respect to a later breach of a
            similar nature or otherwise.

      20.4  Time is of the essence with regard to all obligations to be
            performed on or by a specified date, if any, herein contained.

      20.5  This contract shall be governed by and construed in accordance with
            the laws of the State of Alaska, excluding any conflicts-of-law rule
            or principle which might refer such construction to the laws of
            another state.

      20.6  In the event Buyer has not obtained financing acceptable to Buyer
            for pipeline construction and installation on or before one hundred
            eighty (180) days after the execution of this agreement and so
            notifies Seller, then either party may terminate this agreement by
            written notice. In the event Buyer obtains financing prior to said
            one hundred eighty (180) days, Buyer shall notify Seller within a
            reasonable time thereafter.

                                      -46-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed, in multiple originals, on the day and year first hereinabove written.

                                                 BUYER

                                          ALASKA PIPELINE COMPANY

                                          By /s/ Dale Teel
                                             -----------------------------------
                                                             President

                                                 SELLER

                                          SHELL OIL COMPANY

                                          By /s/ Thomas F. Hart
                                             -----------------------------------

                                      -47-
<PAGE>
THE STATE OF ALASKA )

      BEFORE ME, the undersigned authority, on this day personally appeared DALE
TEEL, President of ALASKA PIPELINE COMPANY, a corporation, known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to
me that he executed the same for the purposes and consideration therein
expressed, in the capacity therein set forth and as the act and deed of said
corporation.

      GIVEN under my hand and seal of office, this the 20th day of December,
1982.

                                             /s/ Margaret L. Moses
                                             -----------------------------------
                                             NOTARY PUBLIC in and for
                                             ALASKA
                                             my commission expires
                                             September 14, 1985

THE STATE OF TEXAS)

COUNTY OF HARRIS )

      BEFORE ME, the undersigned authority, on this day personally appeared
Thomas F. Hart, Vice President of SHELL OIL COMPANY, a corporation, known to me
to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein set forth and as the act and deed of
said corporation.

      GIVEN under my hand and seal of office, this the 17th day of December,
1982.

[STAMP]                                      /s/ Elsie Gilmore
                                             -----------------------------------
                                             NOTARY PUBLIC in and for
                                             Harris County, Texas

                                      -48-
<PAGE>

                                    EXHIBIT A

                         ATTACHED TO AND MADE A PART OF
                          GAS PURCHASE CONTRACT BETWEEN
                               SHELL OIL COMPANY
                                       AND
                             ALASKA PIPELINE COMPANY
                            COOK INLET AREA, ALASKA

<TABLE>
<CAPTION>
                                                       Application
Tract                                                  Serial No.,
 No.               Description                Acres      or Name     Lessor
-----   ---------------------------------   -------   -----------   ------
<S>     <C>                                  <C>       <C>           <C>
  1     T.13N., R.10W., S.M.                  831.66   A-029656       U.S.A.
        Sec. 33: S1/2 SE1/4

        Sec. 34: S1/2 SW1/4,
                 Fractional S1/2 SE1/4

        T.12N., R.10W., S.M.

        Sec.  3: Fractional W1/2 NW1/4
                 except that portion
                 lying within U.S.
                 Survey #3072

        Sec.  4: Fractional all,
                 except that portion
                 lying within U.S.
                 Survey #3072

        Sec.  9: Fractional NW1/4

        Lots 1 and 2, U.S. Survey
        #4540, U.S. Survey #4541

  2     T.13N.,R.10W.,S.M.                   1394.00   A-029657       U.S.A.
        Sec. 26: SW1/4, S1/2 NW1/4
                 Fractional S1/2 SE1/4

        Sec. 27: SE1/4, S1/2 NE1/4,
                 S1/2 SW1/4

        Sec. 33: NE1/4, N1/2 SE1/4

        Sec. 34: N1/2,
                 Fractional N1/2 S1/2

        Sec. 35: Fractional N1/2,
                 Fractional N1/2 S1/2
        Lots 1 and 2, U.S. Survey
        #3962, U.S. Survey #3963
</TABLE>

                                      A-1
<PAGE>

                              Exhibit A (Continued)

<TABLE>
<CAPTION>
                                                          Application
Tract                                                     Serial No.,
 No.              Description                    Acres      or Name     Lessor
-----    ------------------------------------   -------   -----------   ------
<S>      <C>                                    <C>       <C>           <C>
  3      T.13N., R.10W., S.M.                   1090.43   ADL-17658     State
         Sec. 13: SE1/4 (Excl. lands                                     of
                  North of PLO 2162)                                    Alaska

         Sec. 23: S1/2 SE1/4

         Sec. 24: S1/2 SW1/4, E1/2
                  (Excl. lands North
                  of PLO 2162)

         Sec. 25: N1/2 NW1/4,
                  NW1/2 NE1/4,
                  Fractional S1/2 NW1/4,
                  Fractional NW1/4 SW1/4

         Sec. 26: NE1/4,
                  Fractional N1/2 SE1/4

         T.13N., R.9W, S.M.

         Sec. 18: S1/2 SW1/4 (Excl. lands
                  North of PLO 2162)

         Sec. 19: W1/2 NW1/4

  4      T.12N., R.10W., S.M.                    858.10   ADL-17592     State
         Sec.  3: All tide and sub-                                       of
                  merged land within:                                   Alaska
                  W1/2 NE1/4,
                  NE1/4 NE1/4,
                  SW1/4, NW1/4 SE1/4,
                  NW1/4

         Sec.  4: All tide and sub-
                  merged land

         Sec.  9: All tide and sub-
                  merged land in N1/2

         Sec. 10: All tide and sub-
                  merged land in
                  NW1/4 NW1/4
</TABLE>

                                      A-2
<PAGE>
                              Exhibit A Continued
<TABLE>
<CAPTION>
                                                          Application
Tract                                                     Serial NO.,
 No.                   Description               Acres     or Name      Lessor
-----    ------------------------------------   -------   ----------    ------
<S>      <C>                                    <C>       <C>           <C>
  5      T. 13N., R. 10W., S.M.                  488.54   ADL-17599     State
         Sec. 25: Tide and submerged                                      of
                  lands within:                                        Alaska
                  SE1/4 NW1/4,
                  NW1/4 SW1/4

         Sec. 26: Tide and submerged
                  lands within:
                  S1/2 SE1/4,
                  NE1/4 SE1/4

         SEC. 34: Tide and submerged
                  lands within:
                  E1/2 SE1/4

         SEC. 35: Tide and submerged
                  lands within:
                  W1/2,
                  W1/2 NE1/4,
                  NW1/4 SE1/4, NE1/2, NE1/4

  6      T. 13N., R. 10W., S.M.                  240.00   ADL-21126     State
         Sec. 22: SE1/4, SE1/4 NE1/4,                                     of
                  SE1/4 SW1/4                                           Alaska

  7      T. 13N., R. 10W., S.M.                  489.01   ADL-21128     State
         Sec. 23: NE1/4,                                                  of
                  N1/2 SE1/4                                            Alaska

         Sec. 24: NW1/4, N1/2 SW1/4,
                  NW1/4 NE1/4,
                  except that portion
                  lying within
                  ADL-17658, Tract
                  No. 3

  8      T. 13N., R. 10W., S.M.                  480.00   ADL-21127     State
         Sec. 23: W1/2                                                    of
                                                                        Alaska
         Sec. 26: N1/2 NW1/4

         Sec. 27: N1/2 NE1/4
</TABLE>

                                      A-3
<PAGE>

                              Exhibit A Continued

<TABLE>
<CAPTION>
                                                             Application
Tract                                                        Serial No.,
 No.                 Description                   Acres      or Name        Lessor
-----    ---------------------------------------  -------    ----------    ----------
<S>      <C>                                      <C>        <C>           <C>
  9      T. 13N., R. 10W., S.M.                    160.00    ADL-21129      State
         Sec. 27: N1/2  SW1/4,                                                of
                  E1/2 NW1/4                                                Alaska

  10     T. 13N., R. 10W., S.M.                   1108.57    ADL-58831      State
         Sec. 13: All, excl. any land                                         of
                  within the SE1/4                                          Alaska
                  lying South of
                  former PLO 2162

         Sec. 14: E1/2,SW1/4

  11     T. 13N., R. 9W., S.M.                     120.00    ADL-58815      State
         Sec. 7: S1/2 SW1/4, SW1/4 SE1/4                                      of
                                                                            Alaska

  12     T. 13N., R. 9W., S.M.                     329.69    ADL-58820      State
         Sec. 18: W1/2 NE1/4, W1/2,                                           of
                  excl. any lands                                           Alaska
                  in the S1/2 SW1/4
                  lying South of
                  former PLO 2162

  13     T. 12N., R. 10W., S.M.                      5.00    E. F.          Earl F.
         U.S. Survey #3072                                   Roberts       Roberts &
                                                                           Glennie L.
                                                                            Roberts,
                                                                            his wife

  14     T. 13N., R. 10W., S.M.                      5.00    J. W.         Jerome W.
         U.S. Survey #3596                                   Hensley       Hensley &
                                                                            Nellie G.
                                                                            Hensley,
                                                                              his
                                                                              wife
</TABLE>
<TABLE>
RECAPITULATION:
--------------

<S>  <C>                                          <C>
2    U. S. Oil and Gas Leases                     2225.66 Acres
10   State of Alaska Oil and Gas Leases           5364.34 Acres
2    Fee Oil and Gas Leases                         10.00 Acres
     Totals: 14 Tracts                            7600.00 Acres
                                                  =============
</TABLE>

                                      A-4
<PAGE>

                              Exhibit A (Continued)
<TABLE>
<CAPTION>
Reservoirs covered by this          Depths in Type Log
        Agreement                        BRU 212-35
--------------------------          ------------------
<S>                                 <C>
Upper Sterling                          2520'-3125'
Lower Sterling                          3125'-3608'
Upper Beluga                            3608'-5175'
Lower Beluga                            5175'-8115'
</TABLE>

      At such time as lands and leases contiguous to lands hereinabove described
are proved to be a part of the Beluga River Field as defined by the appropriate
State of Alaska governmental authority, then such lands and leases, whether held
or owned by Seller or subsequently acquired by Seller, shall be included within
this Exhibit A.

                                      A-5
<PAGE>

[BELUGA RIVER GAS FIELD MAP]

                                   EXHIBIT B
                         ATTACHED TO AND MADE A PART OF
                         GAS PURCHASE CONTRACT BETWEEN
                               SHELL OIL COMPANY
                                      AND
                            ALASKA PIPELINE COMPANY
                            COOK INLET AREA, ALASKA<PAGE>

                                                                 EXHIBIT 10.28.1

                                                      ENSTAR NATURAL GAS COMPANY
[ENSTAR LOGO]                                         3000 Spenard Road
                                                      P.O.Box 6288
                                                      Anchorage. Alaska 99502
                                                      (907)277-5551

                                                      May 6, 1983

Mr. W. K. Ward
shell Oil Company
  Attention:  Natural Gas
P. 0. Box 576
Houston, Texas 77001
                      Re: Letter Agreement No. 1
Dear Bill:

In order to recognize the present inability of Alaska Pipeline Company ("APC")
or its parent, ENSTAR Natural Gas Company ("ENSTAR"), to sell anticipated
increments of Beluga River Field gas to Chugach Electric Association, Inc.
("Chugach") due to prior commitments by Chugach, Shell Oil Company is hereby
requested to agree to the following amendments to its Gas purchase Contract with
us dated December 20, 1982:

      (a)   Until such time as APC or ENSTAR is able to make sales of Beluga
            River Field gas to Chugach, the Annual Contract Quantity (ACQ) set
            forth in Article V of our contract with you shall be reduced by 12.5
            MMcf per day or 4.563 MMMcf per year, cumulative. The Swing Rate and
            the total contract quantity remain as stated. Such reduction shall
            not trigger a price increase as provided in Section 5.2.2 of our
            December 20, 1982 contract, and Shell Oil Company will not increase
            its sales to existing gas purchaser (Chugach) above the amounts
            provided in existing contracts except as provided in Article IX of
            our December 20, 1982 contract under Sections 9.4 and 9.5.

      (b)   The parties hereto agree to change the date of January 1, 1984 set
            forth in Section 5.3 of Article V of our December 20, 1982 contract
            to July 1, 1984.

      (c)   Except as modified herein all the terms and conditions of our
            December 20, 1982 contract continue in full force and effect.

<PAGE>

Mr. W. K. Ward
Shell Oil Company
May 6, 1983
Page No. Two

If you are agreeable to the foregoing, please arrange for the proper execution
of all copies hereof and return one executed copy to us.

                                           Yours very truly,

                                           ALASKA PIPELINE COMPANY

                                           By  /s/ Dale Teel
                                               ----------------------
                                               Dale Teel, President

ACCEPTED AND AGREED TO:

SHELL OIL COMPANY

By /s/ C. W. Wilson
   --------------------

Date: 5-24-83

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]