Document:

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                                                                   EXHIBIT 10.38

                       MIDWESTERN GAS TRANSMISSION COMPANY

                               OPERATING AGREEMENT

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                                TABLE OF CONTENTS

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ARTICLE I - DEFINITIONS
         Section l.01 - Definitions ..............................................................................1
ARTICLE II - REPRESENTATIONS
         Section 2.01 - Midwestern's Representations .............................................................2
         Section 2.02 - Operator's Representations ...............................................................2
ARTICLE III - OBLIGATIONS OF OPERATOR
         Section 3.01 - Operator's Responsibilities ..............................................................3
         Section 3.02 - Operator's and Other's Records ...........................................................5
         Section 3.03 - Operator's Indemnity .....................................................................5
         Section 3.04 - Midwestern's Indemnity ...................................................................5
         Section 3.05 - Insurance ................................................................................6
ARTICLE IV - EMPLOYEES, CONSULTANTS AND SUBCONTRACTORS
         Section 4.01 - Operator's Employees, Consultants and Subcontractors .....................................7
         Section 4.02 - Standards for Employees ..................................................................7
         Section 4.03 - Consultants and Subcontractors ...........................................................8
ARTICLE V - FINANCIAL, ACCOUNTING AND BILLING PRACTICES
         Section 5.01 - Accounting and Compensation ..............................................................8
         Section 5.02 - Budgets...................................................................................9
         Section 5.03 - Disputed Charges .........................................................................9
         Section 5.04 - Rate Reviews .............................................................................9
         Section 5.05 - Audit ...................................................................................10
ARTICLE VI - INDEPENDENT CONTRACTOR
         Section 6 .01 - Independent Contractor .................................................................10
ARTICLE VII - INTELLECTUAL PROPERTY
         Section 7.01 - Inventions and Copyrights ...............................................................11
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         Section 7.02 - Confidentiality .........................................................................11
ARTICLE VII - TERM
         Section 8.01 - Term ....................................................................................11
         Section 8.02 - Upon Termination ........................................................................12
ARTICLE IX - ACCOUNTING AND TAXES
         Section 9.01 - Fiscal Year .............................................................................12
         Section 9.02 - Location of Records .....................................................................12
         Section 9.03 - Books of Account ........................................................................12
         Section 9.04 - Annual Financial Statements .............................................................12
         Section 9.05 - Tax Returns..............................................................................13
         Section 9.06 - Governmental Reports ....................................................................13
         Section 9.07 - Inspection of Facilities and Records ....................................................13
         Section 9.08 - Deposit of Funds ........................................................................13
ARTICLE X - LAW OF THE CONTRACT AND ARBITRATION
         Section 10.01 - Law of the Contract ....................................................................13
         Section 10.02 - Arbitration ............................................................................14
ARTICLE XI - FORCE MAJEURE
         Section 11.01 - Effect of Force Majeure ................................................................15
         Section 11.02 - Nature of Force Majeure ................................................................15
         Section 11.03 - Non-Force Majeure Situations ...........................................................16
         Section 11.04 - Resumption of Normal Performance .......................................................16
         Section 11.05 - Strikes and Lockouts ...................................................................16
ARTICLE XII - MISCELLANEOUS
         Section 12.01 - Amendment ..............................................................................16
         Section 12.02 - Waivers ................................................................................17
         Section 12.03 - Severability............................................................................17
         Section 12.04 - Governmental Bodies ....................................................................17
         Section 12.05 - Entirety ...............................................................................17
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         Section 12.06 - Recitals ...............................................................................17
         Section 12.07 - Remedies Cumulative ....................................................................17
         Section 12.08 - Conflicts ..............................................................................18
         Section 12.09 - Reporting ..............................................................................18
         Section 12.10 - Operating and Maintenance Plan .........................................................18
         Section 12.11 - Operator's Office.......................................................................18
         Section 12.12 - Attorneys' Fees ........................................................................18
         Section 12.13 - Counterpart Execution  .................................................................18
ARTICLE XIII - NOTICES
         Section 13.01 - Notices ................................................................................19
ARTICLE XIV - ASSIGNMENTS
         Section 14.01 - Assignability ..........................................................................19
         Section 14.02 - Successors and Assigns .................................................................20
         Section 14.03 - Effective Date .........................................................................20

EXHIBIT A - ACCOUNTING PROCEDURE

EXHIBIT B - INSURANCE
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                               OPERATING AGREEMENT

         This Agreement dated as of the 1st day of May, 2001, by and between
Midwestern Gas Transmission Company, a Delaware Corporation, ("Midwestern"), and
Northern Plains Natural Gas Company, a Delaware Corporation ("Operator").
Midwestern and Operator are sometimes referred to collectively herein as the
"parties" and individually as a "party".

RECITALS

         WHEREAS, Midwestern desires to engage Operator to operate the Line (as
defined herein) in accordance with the terms and conditions set forth in this
Agreement; and

         WHEREAS, Operator is willing and able to operate the Line in accordance
with the terms and conditions set forth in this Agreement.

         NOW THEREFORE, in consideration of the representations, covenants and
premises hereinafter set forth the parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.01 - DEFINITIONS

         Except as otherwise indicated by the context, all capitalized terms
used in this Agreement including this Article, the recitals and the exhibits
attached hereto, shall have the meanings set forth below:

         (a)      "Accounting Procedure" shall mean the accounting procedure set
                  forth in Exhibit "A" hereto.

         (b)      "Certified Public Accountants" shall mean a firm of
                  independent public accountants selected from time to time by
                  the Partnership Policy Committee.

         (c)      "Line" shall mean the interstate gas pipeline and related
                  facilities owned by Midwestern, which extends from a point
                  near Joliet, Illinois to its terminus near

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                  Portland, Tennessee, and any extensions, expansions,
                  additions, betterments or renewals thereof.

         (d)      "Partnership Policy Committee" shall mean the Partnership
                  Policy Committee provided for in Section 6.1 of the Amended
                  and Restated Agreement of Limited Partnership of Northern
                  Border Partners, L.P. dated as of October 1, 1993.

         (e)      "Required Accounting Practice" shall mean the accounting rules
                  and regulations, if any, at the time prescribed by the
                  regulatory body or bodies under the jurisdiction of which
                  Midwestern is at the time operating and, to the extent of
                  matters not covered by such rules and regulations, generally
                  accepted principles of accounting at the time prevailing for
                  companies engaged in a business similar to that of Midwestern.

                                   ARTICLE II
                                 REPRESENTATIONS

SECTION 2.01 - MIDWESTERN'S  REPRESENTATIONS

         Midwestern shall cooperate with Operator, including reimbursing
Operator on a timely basis for all reasonable costs, including overhead,
administrative and general expenses incurred by the Operator and overhead,
administrative and general expenses incurred by the Operator's parent and
affiliates in rendering their services in order to facilitate the services to
Midwestern specified herein.

SECTION 2.02 - OPERATOR'S REPRESENTATIONS

         Operator represents that in performing the responsibilities set forth
in Article III, it shall carry out such responsibilities or shall cause
contractors selected to carry out such responsibilities with the same degree of
diligence and care that Operator would exercise if operating its own property in
a sound, workmanlike and prudent manner and it shall comply, and shall require
all contractors to comply, with all relevant laws, statutes, ordinances, safety
codes, regulations and rules applicable to the operation of the Line.

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                                   ARTICLE III
                             OBLIGATIONS OF OPERATOR

SECTION 3.01  - OPERATOR'S RESPONSIBILITIES

         Operator, subject to budget authorizations by the Partnership Policy
Committee, shall perform administrative services and procure and furnish all
materials, equipment, services, supplies and labor necessary for the design,
construction, operation and maintenance of the Line including, without
limitation, the following:

         (a)      provide the day-to-day management supervision, operating and
                  maintenance services, administrative and related services to
                  Midwestern, including, without limitation, legal, accounting,
                  engineering, planning, marketing, budgeting, public relations,
                  human resources, purchasing, treasury, finance, technical
                  services, insurance administration, tax serVices and
                  regulatory matters;

         (b)      make reports to and consult with the Partnership Policy
                  Committee in the form and at the times requested by the
                  Partnership Policy Committee;

         (c)      except as otherwise provided by applicable governmental
                  regulations, retain all charts, records, books of account, tax
                  returns, plans, designs, studies and reports and other
                  documents related to the Line for a period of at least three
                  (3) years from the date of completion of the activity to which
                  such records relate;

         (d)      except as delegated to Operator's parent and affiliates,
                  purchase materials, equipment and supplies in the name of
                  Midwestern necessary for the Line and sell or exchange such
                  materials, equipment and supplies;

         (e)      except as delegated to Operator's parent and affiliates,
                  purchase, option or otherwise acquire in the name of
                  Midwestern rights-of-way, land in fee and permits necessary
                  for the Line; resist the perfection of any liens against
                  Midwestern property and, to the extent permitted by law, hold
                  Midwestern property free from all liens;

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         (f)      review with and advise Midwestern regarding engineering plans
                  and outlines for all necessary design of improvements,
                  additions or replacements of the Line;

         (g)      supervise and report to Midwestern regarding readings of all
                  measuring equipment required in connection with the Line;

         (h)      review the qualifications of and retain outside consultants,
                  contractors, and other services;

         (i)      utilize, as Operator deems necessary, the services of its
                  parent and affiliates, provided that such services are
                  utilized on terms materially no less favorable to Midwestern
                  than those prevailing at the time for comparable services of
                  unaffiliated independent persons or entities.

         (j)      prepare and file all administrative forms or reports
                  (including any regulatory filings, Midwestern tax returns,
                  safety reports, operating reports and any other reports
                  required) with governmental and other agencies required for
                  the Line; all reports in connection with emergency or unusual
                  circumstances shall be made as expeditiously as reasonably
                  possible;

         (k)      make immediate reports to Midwestern of all unusual or
                  significant occurrences in relation to the Line, regardless of
                  whether or not such reports have been required pursuant to
                  Section 3.01(b);

         (l)      make recommendations to Midwestern as required by the
                  Partnership Policy Committee for the proposed budgets required
                  for the Line and operations in connection therewith for the
                  next calendar year or portion thereof;

         (m)      provide an adequate number of qualified supervisory and
                  professional and craft personnel to perform the obligations
                  contemplated hereunder;

         (n)      require all contractors, vendors and suppliers to perform
                  their services in accordance with sound, prudent and
                  workmanlike industry practices;

         (o)      have or provide custody of funds, notes, drafts, acceptances,
                  commercial paper and other securities belonging to Midwestern;
                  keep funds belonging to Midwestern on deposit in one or more
                  banking institutions as approved by the Partnership Policy
                  Committee; and, subject to direction by the Partnership Policy

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                  Committee, invest available funds in the manner provided for
                  by the Partnership Policy Committee, disburse such funds, and
                  keep appropriate records in connection with all the above
                  transactions.

         (p)      meet the standard of care set forth in Section 2.02;

         (q)      prepare and file all administrative forms or reports and any
                  regulatory filings necessary or required to conduct the
                  business of Midwestern.

SECTION 3.02 - OPERATOR'S AND OTHER'S RECORDS

         All of the books, records, charts and other documents prepared and
retained by Operator in connection with the obligations set forth in Section
3.01 shall, as provided in Section 5.05, be made available during normal
business hours to Midwestern or their respective representatives to permit them
to audit and verify the accuracy of any statement, billing, charge or
computation made by Operator in connection with this Agreement. Operator shall
obtain similar rights from contractors, consultants and suppliers performing in
connection with the Line and, to the extent reasonably possible, obtain similar
rights for Midwestern.

SECTION 3.03 - OPERATOR'S INDEMNITY

         Operator shall indemnify and hold harmless Midwestern, its employees or
agents from and against:

         (a)      all actions or failures to act by Operator which are not in
                  accordance with the terms of this Agreement or an express
                  direction by Midwestern;

         (b)      claims for non-payment of any and all contributions,
                  withholding deductions or taxes measured by the wages,
                  salaries or compensation paid to persons employed by Operator
                  in connection herewith.

SECTION 3.04 - MIDWESTERN'S INDEMNITY

         (a)      Midwestern shall indemnify and save harmless the Operator
                  against all actions, claims, demands, costs and liabilities
                  arising out of the acts (or failure to act) of Operator in
                  good faith within the scope of its authority in the course of
                  Midwestern's business and Operator shall not be liable for any
                  obligations,

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                  liabilities, or commitments incurred by or on behalf of
                  Midwestern as a result of any such acts (or failure to act).
                  Operator shall not be indemnified for its willful misconduct.

         (b)      Any and all claims, damages or causes of action in favor of
                  anyone other than Midwestern arising out of the construction,
                  operation, maintenance, upkeep, repair, replacement,
                  improvement and expansion of the Line which are not covered by
                  insurance pursuant to Section 3.05 shall be settled or
                  litigated and defended by Operator in accordance with its best
                  judgment and discretion when (i) the amount involved is less
                  than a ceiling amount to be established by the Partnership
                  Policy Committee; (ii) no injunctive or similar relief is
                  sought; and (iii) no criminal sanction is sought; otherwise,
                  such decision shall be made by the Partnership Policy
                  Committee, and any settlement or defense thereof shall be
                  controlled by the Partnership Policy Committee.

SECTION 3.05 - INSURANCE

         (a)      At all times during the term of this Agreement, Operator shall
                  carry and maintain in force the insurance coverages set forth
                  in Exhibit "B" hereto. Operator shall require that all of its
                  contractors, subcontractors or consultants engaged in any
                  aspect of the operations hereunder or exposed to the risk of
                  any of the operations hereunder carry and maintain insurance
                  coverages commensurate with risks involved in accordance with
                  Operator's established operating practices.

         (b)      All costs for insurance coverages for which Operator is
                  responsible under this section shall be a reimbursable cost
                  pursuant to Section 5.01(b).

         (c)      Operator may carry and maintain such other insurance for its
                  own account as it may deem necessary, but in the event other
                  insurance is carried, Operator agrees to waive and agrees to
                  have its insurers waive any rights of subrogation they may
                  have against Midwestern, or its affiliates, parent of any of
                  them, and/or their directors, officers, employees, servants or
                  agents.

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         (d)      With respect to claims and losses for damage, injury or
                  destruction of property which is a part of the Line, which
                  property is covered by insurance other than insurance provided
                  for in Section 3.05(a), it is agreed that neither Operator nor
                  Midwestern shall have any rights of recovery against one
                  another, nor against the affiliates of each, nor the insurers
                  of any of them, and their rights of recovery are mutually
                  waived. All such policies of insurance purchased to cover the
                  Line or any part thereof, or the operation (in any respect) of
                  the Line or any part thereof, or any gas transported or
                  handled therein, shall be endorsed properly to effectuate this
                  waiver of recovery.

                                   ARTICLE IV
                   EMPLOYEE'S, CONSULTANTS AND SUBCONTRACTORS

SECTION 4.01 - OPERATOR'S EMPLOYEES, CONSULTANTS AND SUBCONTRACTORS

         Operator shall employ or retain and have supervision over the persons
(including consultants and professional service providers or other
organizations) required by Operator to perform its duties and responsibilities
hereunder in an efficient and economically prudent manner. Operator shall pay
all reasonable expenses in connection therewith, including compensation,
salaries, wages and overhead and administrative expense incurred by Operator's
parent and affiliates, and, if applicable, social security taxes, workers'
compensation insurance, retirement and insurance benefits and other such
expenses. Subject to the provisions of Section 6 of the Amended and Restated
Agreement of Limited Partnership of Northern Border Partners, L.P. dated as of
October 1, 1993, the compensation for Operator's employees shall be determined
by Operator. All authorized expenses pursuant to this Section shall be
reimbursed to Operator by Midwestern as provided in the Accounting Procedure.

SECTION 4.02 - STANDARDS FOR EMPLOYEES

         All employees, workmen, foremen and supervisors ("employees") engaged
or directed by Operator to perform Operator's obligations under this Agreement
shall be duly qualified and

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experienced to perform such obligations. Operator shall at all times enforce
strict discipline and maintain good order among such employees, and shall
require such employees to comply with all relevant laws, statutes, ordinances,
safety codes, regulations and rules applicable to the operation of the Line.

SECTION 4.03 - CONSULTANTS AND SUBCONTRACTORS

         The provisions of Sections 4.02 shall be applicable to any contractors,
consultants and/or subcontractors retained in connection herewith.

                                    ARTICLE V
                   FINANCIAL, ACCOUNTING AND BILLING PRACTICES

SECTION 5.01 - ACCOUNTING AND COMPENSATION

         (a)      Operator shall keep a full and complete account of all costs,
                  expenses and expenditures incurred by it in connection with
                  its obligations hereunder in the manner set forth in the
                  Accounting Procedure.

         (b)      Operator shall be reimbursed by Midwestern for all reasonable
                  and proper costs, expenses and expenditures paid by it for
                  Midwestern at the rate and in the manner set forth in the
                  Accounting Procedure; provided, however, that costs incurred
                  by the Operator under Section 3.03 shall not be reimbursed by
                  Midwestern. It is the intent of the parties that Operator
                  shall carry out its services hereunder on a fully reimbursed
                  basis without profit or loss. To the extent that a deviation
                  from this standard occurs, appropriate adjustments will
                  promptly be made.

         (c)      To the extent that Operator enters into activities other than
                  the discharge of its responsibilities as Operator, Operator
                  shall separately account for such costs, expenses and
                  expenditures and Midwestern shall not be billed for such
                  costs, expenses, or expenditures.

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SECTION 5.02 - BUDGETS

         On or before each November 1, Operator shall prepare and submit for
approval by the Partnership Policy Committee an estimate of capital expenditures
and operating income and expenses which Operator anticipates for the next
calendar year. Except as the Partnership Policy Committee may otherwise direct,
the budget approved by the Partnership Policy Committee and then in effect shall
constitute authorization of Operator to incur the expenditures contained in such
budget.

SECTION 5.03 - DISPUTED CHARGES

         Midwestern may, within the time provided in the Accounting Procedure,
take written exception to any bill or statement rendered by Operator for any
expenditure or any part thereof, on the ground that the same was not a
reasonable, authorized, and proper cost incurred by Operator in connection with
the operation, maintenance, upkeep or repair of the Line. Midwestern shall
nevertheless pay in full when due the amount of all statements submitted by
Operator. Such payment shall not be deemed a waiver of the right of Midwestern
to recoup any contested portion of any bill or statement. However, if the amount
as to which such written exception is taken or any part thereof is ultimately
determined by Midwestern not to be a reasonable, authorized, and proper expense
incurred by Operator in connection with the operation, maintenance, upkeep or
repair of the Line, such amount or portion thereof (as the case may be) shall be
refunded by Operator to Midwestern together with interest thereon at an annual
rate (which in no event shall be higher than the maximum rate permitted by
applicable law) equal to the prime rate charged by Citibank of New York, or its
successor entity, from time to time to responsible commercial and industrial
borrowers during the period from the date of payment by Midwestern to the date
of refund by Operator.

SECTION 5.04 - RATE REVIEWS

         Operator shall review from time-to-time the rates and fees charged for
transportation services and recommend to Midwestern revision in such rates and
fees as necessary to reflect

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increased or decreased costs or other changes in the conditions of service in
order to assure that all costs are reflected in the tariffs of Midwestern.

SECTION 5.05 - AUDIT

         Midwestern or its designated representatives, after fifteen (15) days'
notice in writing to Operator, shall have the right during normal business hours
to audit, at its own expense, all books and records of Operator as well as the
relevant books of account of Operator' s contractors relating to the
construction and operation of the Line. Such audits shall not be commenced more
often than twice each calendar year. Midwestern shall have two (2) years after
the close of a calendar year in which to make an audit of Operator's records for
such calendar year. Absent fraud or intentional concealment or misrepresentation
by Operator or its employees, and except for any adjustments which may arise
from FERC compliance audits, Operator shall neither be required nor permitted to
adjust any item unless a claim therefor is presented or adjustment is initiated
within two (2) years after the close of the calendar year in which the statement
therefor is rendered, and in the absence of such timely claims or adjustments,
the bills and statements rendered shall be conclusively established as correct;
provided, however, this shall not prevent adjustment resulting from physical
inventory of the Line.

                                   ARTICLE VI
                             INDEPENDENT CONTRACTOR

SECTION 6.01 - INDEPENDENT CONTRACTOR

         (a)      In performing services pursuant to this Agreement, Operator
                  shall be an independent contractor and not an employee, agent
                  or servant of Midwestern and this Agreement does not create
                  any partnership or joint venture between Midwestern and the
                  Operator.

         (b)      Operator shall comply with all relevant laws, statutes,
                  ordinances, safety codes, regulations and rules applicable to
                  the operation of the Line.

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                                   ARTICLE VII
                              INTELLECTUAL PROPERTY

SECTION 7.01 - INVENTIONS AND COPYRIGHTS

         Any inventions, whether patentable or not, developed or invented or
copyrightable material, developed by Operator or its employees during the
performance of services under this Agreement shall, unless otherwise directed,
be assigned to Midwestern, which shall have the exclusive right to the
exploitation thereof.

SECTION 7.02 - CONFIDENTIALITY

         Because the information and knowledge gained during the performance of
services hereunder may consist of valuable proprietary information, the misuse
or disclosure of which could cause substantial damage to Midwestern, any and all
information obtained by Operator in performance of its obligations hereunder
shall be held in strict confidence by Operator, its employees or agents except
as needed to comply with the purposes of this Agreement. Any contracts entered
into by Operator related to its obligations under this Agreement shall contain a
provision which similarly restricts the use and disclosure of such information.

                                  ARTICLE VIII
                                      TERM

SECTION 8.01 - TERM

         This Agreement shall be effective as of May 1, 2001 and shall continue
for a term of twenty-five (25) years, and thereafter on a year-to-year basis
unless terminated on six (6) months prior written notice by either party hereto.
Operator shall have the right to terminate this Agreement upon 90 days written
notice to Midwestern in the event that Midwestern ceases to be an affiliate of
Northern Border Partners, L.P.

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SECTION 8.02 - UPON TERMINATION

         Termination of this Agreement shall not relieve either party from
paying amounts of money due hereunder which were due prior to or become due
after or as a result of such termination.

                                   ARTICLE IX
                              ACCOUNTING AND TAXES

SECTION 9.01 -  FISCAL YEAR

         The fiscal year of Midwestern shall be the calendar year.

SECTION 9.02 - LOCATION OF RECORDS

         The books of account for Midwestern shall be kept and maintained at the
principal office of Midwestern or at such other place as the Partnership Policy
Committee shall determine.

SECTION 9.03 - BOOKS OF ACCOUNT

         The books of account for Midwestern shall be:

         (a)      maintained on an accrual basis in accordance with Required
                  Accounting Practice; and

         (b)      audited by the Certified Public Accountants at the end of each
                  fiscal year.

SECTION 9.04 - ANNUAL FINANCIAL STATEMENTS

         As soon as practicable following the end of each fiscal year of
Midwestern, the Operator shall prepare and deliver to the Partnership Policy
Committee a profit and loss statement, a statement of changes in financial
position for such fiscal year, and a balance sheet as of the end of such fiscal
year, together with a report thereon of the Certified Public Accountants.

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SECTION 9.05 - TAX RETURNS

         As soon as practicable following the end of each fiscal year of
Midwestern, the Operator shall prepare and deliver to the Partnership Policy
Committee federal, state and local income tax returns and supporting accounting
and tax information and schedules for such fiscal year. Matters of tax policy
for Midwestern shall be the responsibility of, and ultimately determined by the
Partnership Policy Committee.

SECTION 9.06- GOVERNMENTAL REPORTS

         Operator, on behalf of Midwestern, shall prepare and file all reports
prescribed by the FERC and any other commission or governmental agency having
jurisdiction.

SECTION 9.07 - INSPECTION OF FACILITIES AND RECORDS

         Each member of the Partnership Policy Committee shall have the right at
all reasonable times during usual business hours to inspect the facilities of
Midwestern and to examine and make copies of the books of account and other
records of Midwestern. Such right may be exercised through any agent or employee
of such member of the Partnership Policy Committee designated in writing by it
or by an independent public accountant, petroleum engineer, attorney or other
consultant so designated. That member of the Partnership Policy Committee shall
bear all costs and expenses incurred in any examination for such member's
account.

SECTION 9.08 - DEPOSIT OF FUNDS

         Funds of Midwestern shall be deposited in such banks or other
depositories as shall be designated by the Partnership Policy Committee.

                                    ARTICLE X
                       LAW OF THE CONTRACT AND ARBITRATION

SECTION 10.01 - LAW OF THE CONTRACT

         This Agreement and all other agreements relating thereto shall be
construed and interpreted under the laws of the State of Nebraska.

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SECTION 10.02 - ARBITRATION

         (a)      In the event that the parties are unable to agree on any of
                  the matters set forth herein, except as provided in Section
                  5.03, either Midwestern or Operator may upon written notice
                  call for submission of such matter to arbitration. The party
                  requesting arbitration shall set forth in such notice in
                  adequate detail the issues to be arbitrated, and within ten
                  (10) days from the receipt of such notice, the other party may
                  set forth in adequate detail additional related issues to be
                  arbitrated. If arbitration is invoked by either party, the
                  decision of the arbitrators shall be final and binding upon
                  both parties.

         (b)      Such binding arbitration shall be conducted by a person or
                  entity knowledgeable and experienced in pipeline operations
                  matters. In the event the parties are unable to agree upon
                  such person or entity, they shall then each select a person or
                  entity having the qualifications set forth above, and such
                  persons or entities selected shall mutually agree upon a
                  similarly qualified third person or entity to complete the
                  arbitration panel. In the event that the persons selected by
                  the parties are unable to agree on a third member of the panel
                  within sixty (60) days after their selection, such person
                  shall be designated by the American Arbitration Association or
                  such other person the parties mutually agree upon. Upon final
                  selection of the entire panel, such panel shall, as
                  expeditiously as possible, render a decision on the matter
                  submitted for arbitration.

         (c)      Upon the determination of any such dispute, the arbitrators
                  shall bill the costs attributable to such binding arbitration
                  to the party whose position they determine is farthest away
                  from the actual decision rendered; provided, however, that the
                  arbitrators shall be empowered to apportion such costs between
                  the parties if they deem it appropriate.

         (d)      It is the intent of the parties that the matters agreed upon
                  to be arbitrated be decided as set forth herein and they shall
                  not seek to have this Article X rendered unenforceable or to
                  have such matter decided in any other way.

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                                   ARTICLE XI
                                  FORCE MAJEURE

SECTION 11.01 - EFFECT OF FORCE MAJEURE

         In the event that either Midwestern or Operator is rendered unable, by
reason of an event of force majeure, to perform, wholly or in part, any
obligation or commitment set forth in this contract, then upon such party's
giving notice and full particulars of such event as soon as practicable after
the occurrence thereof, the obligations of both parties, except for unpaid
financial obligations arising prior to such event of force majeure, shall be
suspended to the extent and for the period of such force majeure condition.

SECTION 11.02 - NATURE OF FORCE MAJEURE

         The term "force majeure" as employed in this Agreement shall mean acts
of God, strikes, lockouts or industrial disputes or disturbances, civil
disturbances, arrests and restraint from rulers of people, interruptions by
government or court orders, present and future valid orders, decisions or
rulings of any governmental entity having proper jurisdiction, acts of the
public enemy, wars, riots, blockades, insurrections, inability to secure labor
or inability to secure materials, including inability to secure materials by
reason of allocations promulgated by authorized governmental agencies epidemics,
landslides, lightning, earthquakes, fire, storms, floods, washouts, inclement
weather which necessitates extraordinary measures and expense to construct
facilities and/or maintain operations, explosions, breakage or accident to
machinery or lines of pipe, freezing of wells or pipelines inability to obtain
or delays in obtaining easements or rights-of-way, the making of repairs or
alterations to wells, pipelines or plants, partial or entire failure of gas
supply or any other cause, whether of the kind herein enumerated or otherwise,
not reasonably within the control of the party claiming force majeure.

                                       15
<PAGE>

SECTION 11.03 - NON-FORCE MAJEURE SITUATIONS

         Neither Operator nor Midwestern shall be entitled to the benefit of the
provisions of Section 11.01 under the following circumstances:

         (a)      To the extent that the failure was caused by the party
                  claiming suspension having failed to remedy the condition by
                  taking all reasonable acts, short of litigation, if such
                  remedy requires litigation, and having failed to resume
                  performance of such commitments or obligations with reasonable
                  dispatch;

         (b)      If the failure was caused by lack of funds, or with respect to
                  the payment of any amount or amounts then due hereunder;

         (c)      To the extent that the failure was caused or contributed to by
                  the negligence of Operator or the Partnership and such
                  negligence shall be the cause of such failure.

SECTION 11.04 - RESUMPTION OF NORMAL PERFORMANCE

         Should there be an event of force majeure affecting performance
hereunder, such events shall be remedied with all reasonable dispatch to insure
resumption of normal performance.

SECTION 11.05 - STRIKES AND LOCKOUTS

         Settlement of strikes and lockouts shall be entirely within the
discretion of the party affected, and the requirement in Section 11.04 that any
event of 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
persons or entities directly or indirectly involved in such strikes or lockouts
when such course is inadvisable in the discretion of the party having such
difficulty.

                                   ARTICLE XII
                                  MISCELLANEOUS

SECTION 12.01 - AMENDMENT

         This Agreement shall only be amended by an instrument in writing
executed by both parties.

                                       16
<PAGE>

SECTION 12.02 - WAIVERS

         A waiver by a party at any time of its rights with respect to a default
under this Agreement, or with respect to any other matter in connection with
this Agreement, shall not be deemed a waiver with respect to any other or
subsequent default or matter.

SECTION 12.03 - SEVERABILITY

         If any provision of this Agreement shall be invalid or unenforceable to
any extent, the remainder of this Agreement shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.

SECTION 12.04 - GOVERNMENTAL BODIES

         This Agreement is subject to all valid orders, rules and regulations of
any governmental body having jurisdiction over the parties hereto, or this
Agreement.

SECTION 12.05 - ENTIRETY

         This Agreement contains the entire agreement between the parties and
except as stated herein there are no oral promises, agreements or warranties
affecting it.

SECTION 12.06 - RECITALS

         For the purpose of interpreting this Agreement, the Recitals shall be
considered incorporated herein as if set forth in full.

SECTION 12.07 - REMEDIES CUMULATIVE

         Remedies provided under the provisions of this Agreement shall be
cumulative and, except as to the agreement for binding arbitration contained in
Article X hereof, shall be in addition to the remedies provided by law or in
equity.

                                       17
<PAGE>

SECTION 12.08 - CONFLICTS

         In the event there is any conflict between this Agreement and any
schedule or subsequent agreement referred to herein, the provisions hereof shall
be deemed controlling.

SECTION 12.09 - REPORTING

         Operator shall report to the Partnership Policy Committee.

SECTION 12.10 - OPERATING AND MAINTENANCE PLAN

         Operator shall submit to Midwestern for approval an operating and
maintenance plan for the Line, as required by the Minimum Federal Safety
Standards, Part 192, of the Department of Transportation.

SECTION 12.11 - OPERATOR'S OFFICE

         Operator may select the location of its office or offices to perform
its obligation hereunder.

SECTION 12.12 - ATTORNEYS' FEES

         Should any litigation be commenced between the parties concerning any
provision of this Agreement or the rights and duties hereunder, the party
prevailing in such litigation shall be entitled, in addition to such other
relief as may be granted in such proceeding, to a reasonable sum as and for
their attorneys' fees in such litigation, which sum shall be determined in such
litigation or in a separate action for such purpose.

SECTION 12.13 - COUNTERPART EXECUTION

         This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same instrument.

                                       18
<PAGE>

                                  ARTICLE XIII
                                     NOTICES

SECTION 13.01 - NOTICES

         Unless herein provided to the contrary, any notice called for in this
Agreement shall be in writing and shall be considered as having been given if
delivered personally or by mail with all postage or charges prepaid, to either
Midwestern or Operator at the places designated. Routine communication,
including monthly statements and payments shall be considered as duly delivered
when mailed by ordinary mail. Normal operating instructions can be made by
telephone. Unless changed, the addresses of the parties are as follows.

         "OPERATOR"                 NORTHERN PLAINS NATURAL GAS COMPANY
                                    1111 South 103rd Street
                                    Omaha, Nebraska 68124

         "MIDWESTERN"               MIDWESTERN GAS TRANSMISSION COMPANY
                                    1111 South 103rd Street
                                    Omaha, Nebraska 68124

Any notice given to Midwestern under this Agreement shall be promptly
transmitted by it to the Partnership Policy Committee.

                                   ARTICLE XIV
                                   ASSIGNMENT

SECTION  14.01 - ASSIGNABILITY

         As to the assignment of this Agreement:

         (a)      This Agreement shall not be assigned by either Midwestern or
                  Operator without the written consent of the other.

         (b)      Consent to assignment hereunder shall not be unreasonably
                  withheld by either party hereto.

                                       19
<PAGE>

SECTION 14.02 - SUCCESSORS AND ASSIGNS

         This Agreement and all of the obligations and rights herein established
shall extend to and be binding upon and shall inure to the benefit of the
respective successors and assigns of the respective parties hereto.

SECTION 14.03 - EFFECTIVE DATE

         Any assignment hereunder shall be effective on the first day of the
month following the month during which the assignment is completed.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written.

<Table>
<S>                                                 <C>
NORTHERN PLAINS NATURAL GAS                         MIDWESTERN GAS TRANSMISSION
COMPANY                                             COMPANY

BY:   /s/ Jerry L. Peters                           BY:   /s/ William R. Cordes
    -----------------------------------------           ------------------------------------------
Name:     Jerry L. Peters                           Name:     William R. Cordes
Title:    Vice President Finance & Treasurer        Title:    President
</Table>

                                       20
<PAGE>

                                    EXHIBIT A

                                       TO

                               OPERATING AGREEMENT

                              ACCOUNTING PROCEDURE

                                    ARTICLE I
                               GENERAL PROVISIONS

1.01     STATEMENTS AND BILLINGS. Operator may bill Midwestern on the first day
         of each month for the estimated costs and expenses for the month and
         any adjustment which may be necessary to correct prior estimated
         billings to actual. Such bills will be summarized by appropriate
         classifications indicative of the nature thereof.

1.02     PAYMENT BY MIDWESTERN. Midwestern shall pay all bills presented in the
         Operating Agreement on or before the l5th day after the billing date.
         If payment is not made within such time, the unpaid balance shall bear
         interest until paid at a rate (which in no event shall be higher than
         the maximum rate or rates permitted by applicable law) equal to the
         prime rate charged by the Citibank of New York, or its successor
         entity, from time to time to responsible commercial and industrial
         borrowers; provided, however, that if employees of Operator are
         responsible for writing Midwestern's checks and Midwestern has
         sufficient funds to make payment, no interest charge shall be imposed
         for late payment. Payment by or on behalf of Midwestern shall not be
         deemed a waiver of the right to recoup any amount in question.

                                      A-1
<PAGE>

1.03     ADJUSTMENTS. Except for any adjustments which may arise from FERC
         Compliance Audits, payment of any such bills shall not prejudice the
         right of Midwestern to protest or question the correctness thereof;
         provided however, all bills and statements rendered to Midwestern by
         Operator during any calendar year shall conclusively be presumed to be
         true and correct after 24 months following the end of any such calendar
         year, unless prior to the end of said 24 month period Midwestern takes
         written exception thereto and makes claim on Operator for adjustment;
         provided, however, this shall not prevent adjustment resulting from
         physical inventory of the Line. No adjustment favorable to Operator
         shall be made unless it is made within the same prescribed period.

1.04     FINANCIAL RECORDS. Operator shall maintain accurate books and records
         in accordance with the Federal Energy Regulatory Commission's Uniform
         System of Accounts for Class A and B natural gas companies or any
         successor system thereto covering all of Operator's actions under this
         Operating Agreement.

                                   ARTICLE II
                      CAPITAL ITEMS AND CONSTRUCTION COSTS

         Except for items included in a previously approved budget, prior to the
acquisition of any property, real or personal, costing more than a ceiling
amount to be established by the Partnership Policy Committee in the name or on
behalf of Midwestern which under the accounting rules and regulations, if any,
at the time prescribed by the regulatory body or bodies under the jurisdiction
of which Midwestern is at the time operating, might be capitalized, Operator
shall prepare and submit to Midwestern a forecast of the cost of all such
property. Upon approval of such forecast by Midwestern, Operator shall have
authority to purchase such property in Midwestern's name or in Operator's name
for the benefit of Midwestern without further approval or action by Midwestern.
To the extent Operator owns property necessary or desirable for the operation
and maintenance of the Line which (i) under the accounting rules and

                                      A-2
<PAGE>

regulations, if any, at the time prescribed by the regulatory body or bodies
under the jurisdiction of which Midwestern is at the time operating, might be
capitalized, (ii) Operator in its sole discretion is willing to transfer for
consideration to Midwestern, and (iii) can be transferred by Operator to
Midwestern free and clear of all prior liens and encumbrances, Operator, if
approved by Midwestern, may so transfer such property to Midwestern and charge
Midwestern the net book value thereof as reflected on the books of Operator on
the date of transfer.

                                   ARTICLE III
                        COSTS, EXPENSES AND EXPENDITURES

         Subject to the limitations hereinafter prescribed and the provisions of
the Operating Agreement to which this Accounting Procedure is an exhibit,
Operator shall charge Midwestern for all costs and expenses incurred by Operator
(except those costs incurred under Section 3.03 of the Operating Agreement) in
connection with the performance of the responsibilities set forth in Article III
of the Operating Agreement, including without limitation, the administration,
planning, accounting, design, construction, operation, maintenance, or
abandonment of the Line (hereinafter collectively referred to as "Operation of
the Line"). Such costs and expenses shall include, without limitation, the
following:

3.01     RENTALS. All rentals paid by Operator.

3.02     LABOR COSTS.

         (a)      Salaries and wages of employees of Operator and Operator's
                  parent and affiliates providing services in connection with
                  the Operation of the Line and, in addition, amounts paid as
                  salaries and wages of others temporarily employed in
                  connection therewith. Cost of holiday, vacation, sickness,
                  jury service and other fringe benefits and customary
                  allowances paid to persons whose salaries and wages are
                  chargeable under this paragraph (a).

                                      A-3
<PAGE>

         (b)      Expenditures or contributions made pursuant to assessments
                  imposed by governmental authority which are applicable to
                  salaries, wages and costs chargeable under paragraph (a)
                  above. The reasonable cost of plans for employees' group life
                  insurance, hospitalization, disability, pension, retirement,
                  savings and other benefit plans, applicable to labor costs
                  chargeable under paragraph (a) above.

3.03     REIMBURSABLE EXPENSES OF EMPLOYEES. Reasonable personal expenses of
         employees whose salaries and wages are chargeable under Section 3.02(a)
         of this Exhibit A. As used herein, the term "personal expenses" shall
         mean the usual out-of-pocket expenditures incurred by employees in the
         performance of their duties and for which such employees are
         reimbursed. Operator shall maintain documentation for such expenses in
         accordance with the standards of the Internal Revenue Service.

3.04     MATERIAL, EQUIPMENT AND SUPPLIES. It is contemplated that all material;
         equipment and supplies will be owned by Midwestern and purchased or
         furnished for its account. So far as is reasonably practical and
         consistent with efficient and economical operation, only such material
         shall be obtained for the Line as may be required for immediate use,
         and the accumulation of surplus stock shall be avoided. To the extent
         reasonably possible, Operator shall take advantage of discounts
         available by early payments and pass such benefits on to Midwestern.
         Material, equipment and supplies furnished by Operator, if any, shall
         be priced at cost plus carrying costs to be established by Operator
         based on actual experience.

3.05     TRANSPORTATION. Transportation of employees, equipment and material and
         supplies necessary for the Operation of the Line. It is anticipated
         that all transportation equipment will be owned by Midwestern;
         provided, however, any automobiles, airplanes and trucks owned or
         obtained from Operator's parent or affiliates by Operator and approved
         for use

                                      A-4
<PAGE>

         for the Operation of the Line will be billed to Midwestern at
         reasonable rates based on Operator's actual costs.

3.06     SERVICES.

         (a)      The cost of contract services and utilities procured from
                  outside sources.

         (b)      Use and services of vehicles, equipment and facilities
                  furnished by Operator as provided in Section 3.05 of this
                  Exhibit A.

3.07     LEGAL EXPENSES AND CLAIMS. All costs and expenses of handling,
         investigating and settling litigation or claims arising by reason of
         the Operation of the Line or necessary to protect or recover any Line
         property, including, but not limited to, attorney's fees, court costs,
         cost of investigation or procuring evidence and any judgments paid or
         amounts paid in settlement or satisfaction of any such litigation or
         claims. Operator shall credit Midwestern for judgments received or
         amounts received in settlement of litigation, with respect to any claim
         asserted on behalf of Midwestern.

3.08     TAXES. All taxes of every kind and nature assessed or levied upon or
         incurred in connection with the Operation of the Line or on the Line or
         other property of Midwestern and which taxes have been paid by the
         Operator for the benefit of Midwestern or in connection with the
         Operation of the Line, including charges for late payment arising from
         extensions of the time for filing which are caused by Midwestern.

3.09     INSURANCE. Net of any returns, refunds, or dividends, all premiums paid
         and expenses incurred for insurance required to be carried under the
         Operating Agreement.

3.10     PERMITS, LICENSES AND BOND. Cost of permits, licenses and bond premiums
         necessary in the performance of Operator's duties.

                                      A-5
<PAGE>

3.11     OVERHEAD, ADMINISTRATIVE AND GENERAL EXPENSE. All overhead,
         administrative and general expenditures of Operator and Operator's
         parent and affiliates incurred in connection with the Operation of the
         Line.

                                      A-6
<PAGE>

                                    EXHIBIT B

OPERATOR'S INSURANCE

1.       Workers' Compensation and Employers Liability. Worker's Compensation
         and Employers Liability Insurance as required by the laws of the state
         where services are performed. This insurance shall be endorsed to
         provide: all states coverage, voluntary compensation coverage and
         occupational disease. The Employers Liability insurance shall provide a
         limit of $1,000,000.

2.       Commercial General Liability. Commercial General Liability insurance,
         or self-insurance, on a broad form, including operations, premises,
         completed operations, contractual liability, independent contractor and
         the hazards x, c, u coverage with a combined single limit of $1,000,000
         for bodily injury and property damage and a limit of $2,000,000 in the
         aggregate.

3.       Business Automobile Liability. Business Automobile Liability insurance
         with a combined single limit of $1,000,000 including coverage for
         owned, non-owned and hired vehicles.

4.       Pollution Liability. Pollution Liability insurance with a per incident
         and aggregate limit of $1,000,000.

5.       Excess Umbrella Liability. Excess Umbrella Liability insurance applying
         excess of the limits required in coverages 1., 2., 3., and 4. above
         with a $25,000,000 combined single limit.

6.       Professional Liability and/or Errors and Omissions Insurance.
         Professional Liability and/or Errors and Omissions insurance, if
         reasonably requested by and costs reimbursed by Midwestern.

7.       Deductibles. Liability insurance coverages may, at Operator's
         discretion, include a deductible provision or other form of risk
         retention of up to $250,000.

                                      A-7<PAGE>
                                                                    EXHIBIT 10.9

                             [ENRON CORP LETTERHEAD]

August 8, 1989

Northern Border Pipeline Company
2223 Dodge Street
Omaha, Nebraska 68102

Dear Ladies and Gentlemen:

                                    GUARANTY

As an inducement to Northern Border Pipeline Company (hereinafter "Northern
Border") to grant credit, or assume a credit risk, from time to time, in respect
to transportation of gas by Northern Border pursuant to a U. S. Shippers Service
Agreement (the "Agreement"), which Agreement is identical to or substantially
the same as the copy attached hereto, for the benefit of Enron Gas Marketing,
Inc. (hereinafter the "Shipper"), Enron Corp. (hereinafter the "Guarantor"),
shall pay to Northern Border promptly when due, or upon demand thereafter the
full amount of all indebtedness due to Northern Border from Shipper, pursuant to
Article 4 of the Agreement (including interest and expenses of all collection
and reasonable counsel's fees incurred by Northern Border by reason of the
default of Shipper), up to an annual aggregate amount of U.S. $15,000,000.00
during each year that the Agreement remains in effect.

This Guaranty by Guarantor shall remain in full force and effect during the term
of the Agreement, and any extension or renewal thereof and thereafter until
Shipper has fully performed all of its obligations under the Agreement. This
Guaranty applies to all successors and/or assigns of Shipper; provided, however,
that in the event Shipper is released pursuant to the Agreement and Northern
Border's FERC Gas Tariff by Northern Border from its obligations under the
Agreement, the Guarantor shall have the right to cancel this Guaranty by written
notice to Northern Border on or after the effective date of such release.

Guarantor waives notice of acceptance hereof and notice of the volumes of gas
transported by Northern Border for the benefit of Shipper, and of the amounts
and terms thereof, and of all defaults or disputes with Shipper, and of the
settlement or adjustment of such defaults or disputes. The Guarantor, without
affecting its liability hereunder in any respect, consents to and waives notice
of all changes of terms, the withdrawal of extension of credit or time to pay,
the release of the whole or any part of the indebtedness, the settlement or
compromise of differences, the acceptance or release of security, the acceptance
of notes, or any other form of obligation for Shipper's indebtedness, and the
demand, protest and notice of protest of such instruments or their endorsements.

<PAGE>

Northern Border Pipeline Company August 8, 1989 Page 2

The obligation of the Guarantor is a primary obligation and covers the payment
of all existing and future indebtedness obligations of Shipper to Norther Border
under the Agreement. This obligation shall be enforceable before or after
proceeding against Shipper or against any security held by Northern Border and
shall be effective regardless of the solvency or insolvency of Shipper at any
time, the extension or modification of the indebtedness of Shipper by operation
of law or the subsequent incorporation, reorganization, merger or consolidation
of Shipper or any other change in the composition, nature, personnel or location
of Shipper.

THIS GUARANTY SHALL FOR ALL PURPOSES BE DEEMED TO BE MADE IN, AND SHALL BE
GOVERNED BY, THE LAWS OF THE STATE OF NEBRASKA. This Guaranty shall be binding
upon Guarantor, its successors and assigns and shall inure to the benefit of
Northern Border, its successors and assigns.

Guarantor reserves to itself all rights, setoffs, counterclaims and other
defenses, if any, which Shipper is or may be entitled to arising from or out of
the Agreement and/or Northern Border's FERC Gas Tariff.

The Guarantor in executing this Guaranty, represents and warrants to Northern
Border that:

        (i)   The Guarantor is a corporation duly organized and existing in good
              standing and had full power and authority to make and deliver this
              Guaranty;

        (ii)  The execution and delivery and performance of this Guaranty by the
              Guarantor has been duly authorized by all necessary action of its
              directors and shareholders and do not and will not violate the
              provisions of, or constitute default under, any presently
              applicable law or its articles of incorporation or by laws or any
              agreement presently binding on it; and

        (iii) This Guaranty has been duly executed and delivered by the
              authorized officers of the Guarantor and constitutes its lawful,
              binding and legally enforceable obligation.

IN WITNESS WHEREOF, this Guaranty has been duly executed by Rodney L. Gray ,
this 24th day of August, 1989.

"GUARANTOR"

Enron Corp.                                    Attest:

BY:      /s/ Rodney L. Gray                            /s/Linda F. Jenkins
     ----------------------------------       ----------------------------------
         Rodney L. Gray                                Linda F. Jenkins
         Vice President and Treasurer                  Assistant Secretary

Cc:      G. Heller
         W. Millhouse
         N. Oring

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