October 31, 2001

Northern Natural Gas Company
1111 South 103rd Street
Omaha, NE
68124-1000

Attention:  Rod Hayslett,
            Managing Director and Chief Financial Officer

                 $450 MILLION 364-DAY REVOLVING CREDIT FACILITY
                                COMMITMENT LETTER

Ladies and Gentlemen:

Each of The Chase Manhattan Bank ("Chase") and Citibank, N.A. ("Citibank") is
pleased to inform Northern Natural Gas Company (the "Borrower") of its several
commitment to provide the Borrower up to, in the case of Chase, $180 million and
in the case of Citibank, $270 million of a $450 million 364-day revolving credit
facility (the "Facility") and to act as a Co-Administrative Agent for the
Facility, in each case subject to the terms and conditions of this letter and
the attached Annex I (collectively, and together with the Fee Letter referred to
below, this "Commitment Letter"). Also, Citibank is pleased to inform the
Borrower of its commitment to act as the Paying Agent for the Facility, subject
to the terms and conditions of this Commitment Letter. In addition, J.P. Morgan
Securities Inc. ("JP Morgan") and Salomon Smith Barney Inc. ("SSBI"), are
pleased to inform the Borrower that they may arrange a syndicate of lenders (the
"Lenders") of the Facility after the closing of the Facility, subject to the
terms and conditions of this Commitment Letter.

Section 1. Conditions Precedent. Each of the respective commitments and
agreements above of Citibank, SSBI, Chase and JP Morgan hereunder is subject to:
(i) the preparation, execution and delivery of mutually acceptable loan
documentation (the "Operative Documents"); (ii) the absence of (A) any material
adverse change in the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its subsidiaries, taken
as a whole, since December 31, 2000, (B) except as publicly disclosed or
disclosed in writing to Citibank, SSBI, Chase and JP Morgan before the execution
of this Commitment Letter, a material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or prospects of
Enron Corp. and its subsidiaries, taken as a whole, since December 31, 2000, and
(C) any circumstance, change or condition (including the continuation of any
existing condition) in the loan syndication, financial or capital markets
generally that, in the judgment of SSBI, Citibank, JP Morgan, or Chase, would
materially impair syndication of the Facility; (iii) the accuracy and
completeness in all material respects, as set forth in Article 8, of all
representations that the Borrower and Enron Corp. make to Citibank, SSBI, Chase
or JP Morgan and all information that the Borrower and Enron Corp. furnish to
Citibank, SSBI, Chase or JP Morgan and the Borrower's and Enron Corp.'s
compliance with the terms of this Commitment Letter; (iv) completion of due
diligence with results satisfactory to Citibank, SSBI, Chase, and JP Morgan,
including, without limitation, with respect to Enron Corp. and the Borrower and
their respective subsidiaries and affiliates; (v) receipt of a review report
from Arthur Andersen on the Borrower's third quarter 2001 unaudited





financial statements satisfactory to Citibank, SSBI, Chase and JP Morgan; (vi)
receipt of documentation satisfactory to Citibank, SSBI, Chase and JP Morgan
whereby the Borrower assumes approximately $115,000,000 of the obligations under
the Citibank, N.A. $250,000,000 prepayment transaction with Enron Corp. or one
of its subsidiaries ("Assumption Documents"); (vii) the Borrower's issuance of,
or the transfer by its shareholder of, a to be determined amount of the
Borrower's capital stock to a trust the beneficiary of which is the Paying Agent
and the amendment of the Borrower's certificate of incorporation to provide that
a voluntary bankruptcy petition for the Borrower may only be approved by a vote
of all the Borrower's shareholders pursuant to documents satisfactory to
Citibank, SSBI, Chase and JP Morgan ("Corporate Amendment Documents"); (viii) an
opinion from Borrower's counsel with respect to the enforceability of the
Assumption Documents and the Corporate Amendment Documents; (ix) satisfaction of
the conditions to Closing set forth in Annex I; and (x) the payment in full of
all fees, expenses and other amounts payable under this Commitment Letter.

Section 2. Commitment Termination. Each of the respective commitments of
Citibank, SSBI, Chase and JP Morgan hereunder will terminate on the earlier of
(a) the date the Operative Documents become effective, and (b) November 16,
2001. Before such date, each of Citibank, SSBI, Chase, and JP Morgan may
terminate its commitment hereunder if any event occurs or information becomes
available that, in its reasonable judgment, results or is reasonably likely to
result in the failure to satisfy any condition set forth in Section1.

Section 3. Syndication. Subject to the Borrower's acceptance of the Lenders,
SSBI and JP Morgan will manage all aspects of the syndication of the Facility in
consultation with the Borrower, including the timing of all offers to potential
Lenders, the determination of the amounts offered to potential Lenders, the
acceptance of commitments of the Lenders and the compensation to be provided to
the Lenders.

Each of the Borrower and Enron Corp. shall actively assist SSBI and JP Morgan in
forming a syndicate acceptable to SSBI and JP Morgan. The Borrower's and Enron
Corp.'s assistance in forming such a syndicate shall include but not be limited
to (i) making senior management and representatives of the Borrower and Enron
Corp. available to participate in information meetings with potential Lenders,
if required, at such times and places as SSBI and JP Morgan may reasonably
request; (ii) using the Borrower's and Enron Corp.'s commercially reasonable
efforts to ensure that the syndication efforts benefit from the Borrower's and
Enron Corp.'s existing lending relationships; and (iii) providing SSBI and JP
Morgan with all information reasonably deemed necessary by SSBI or JP Morgan in
connection with the syndication process.

To ensure an effective syndication of the Facility, each of the Borrower and
Enron Corp. agrees that, until the termination of the syndication (as determined
by SSBI and JP Morgan), neither the Borrower nor Enron Corp. will or will permit
any of Enron Corp.'s 90% or greater directly or indirectly owned subsidiaries)
to, syndicate or issue, attempt to syndicate or issue, announce or authorize the
announcement of the syndication or issuance of, or engage in discussions
concerning the syndication or issuance of, any debt facility or debt security
(including any renewals thereof) in the commercial bank market, without the
prior written consent of SSBI and JP Morgan; provided, however, that the
foregoing shall not limit (i) Enron Corp. and its subsidiaries' ability to issue
commercial paper, other short-term debt programs currently in place, equity or
public debt securities, (ii) Transwestern Pipeline Company's ability to enter
into a loan facility with Citibank and Chase, or (iii)(A) the Florida Gas
Transmission Company's ability to enter into a $210,000,000 bank credit
facility, (B) the Wessex Water Services' ability to enter into a 40 million
pounds sterling index linked private placement, (C) Azurix Europe Limited's
ability to enter into a 425 million pounds sterling revolving credit facility,
(D) Elektro's ability to enter into a R$180 million bond issue, and (E)
increases in existing accounts receivable and working capital facilities and
entering into new accounts receivable and working capital facilities that are
limited solely to those purposes.


                                       -2-





Citibank and Chase will act as the sole Co-Administrative Agents for the
Facility, Citibank will act as sole Paying Agent for the Facility, and SSBI and
JP Morgan will act as sole arrangers for the Facility. No additional agents,
co-agents or arrangers will be appointed, or other titles conferred, without the
consent of Citibank, SSBI, Chase, JP Morgan and the Borrower.

Section 4. Fees. In addition to the fees described in Annex I, the Borrower
shall pay the non-refundable fees set forth in that certain letter agreement
dated the date hereof (the "Fee Letter") among the Borrower, Citibank, SSBI,
Chase and JP Morgan. The terms of the Fee Letter are an integral part of the
respective commitments of Citibank, SSBI, Chase and JP Morgan hereunder and
constitute part of this Commitment Letter for all purposes hereof.

Section 5. Indemnification. Each of the Borrower and Enron Corp. shall indemnify
and hold harmless SSBI, JP Morgan, Citibank, Chase, and each of their respective
affiliates and each of their respective officers, directors, employees, agents,
advisors and representatives (each, an "Indemnified Party") from and against any
and all claims, damages, losses, liabilities and reasonable out-of-pocket
expenses (including, without limitation, reasonable fees and disbursements of
counsel) (collectively, "Losses"), joint or several, that may be incurred by or
asserted or awarded against any Indemnified Party (including, without
limitation, in connection with any investigation, litigation or proceeding or
the preparation of a defense in connection therewith), in each case arising out
of or in connection with or by reason of this Commitment Letter or the
transactions contemplated hereby or thereby or any actual or proposed use of any
proceeds or any letter of credit under the Facility, except to the extent such
Losses resulted from the loss of anticipated profits or such Indemnified Party's
gross negligence or willful misconduct or from a claim asserted by another
Indemnified Party. In the case of an investigation, litigation or other
proceeding to which the indemnity in this paragraph applies, such indemnity
shall be effective whether or not such investigation, litigation or proceeding
is brought by the Borrower or Enron Corp., any of its directors, security
holders or creditors, or any other person (other than an Indemnified Party) or
whether or not an Indemnified Party is otherwise a party thereto and whether or
not the transactions contemplated hereby are consummated.

No Indemnified Party shall have any liability (whether in contract, tort or
otherwise) to the Borrower or Enron Corp. or any of its security holders or
creditors for or in connection with the transactions contemplated hereby, except
for direct damages (as opposed to special, indirect, consequential or punitive
damages (including, without limitation, any loss of profits, business or
anticipated savings)) resulting from such Indemnified Party's gross negligence
or willful misconduct. Except as set forth in the next succeeding sentence,
neither the Borrower nor Enron Corp. shall have any liability to any Indemnified
Party (whether in contract, tort or otherwise) in connection with the Facility
for punitive, exemplary or treble damages. If (a) an Indemnified Party is
required to pay damages of the type specified in the preceding sentence to
another person (that is not an Indemnified Party), and (b) such Indemnified
Party would be entitled to indemnification under this Section 5 but for the
limitation set forth in the preceding sentence, then the Indemnified Party shall
nonetheless be entitled to indemnification for such Losses.

The foregoing provisions of this Section 5 apply to Losses resulting from events
occurring prior to the closing of the Facility. From and after the closing of
the Facility, the indemnification provisions of the Operative Documents shall be
applicable.

Section 6. Costs and Expenses. Promptly following demand, the Borrower shall
pay, or reimburse Citibank, SSBI, Chase and JP Morgan (as the case may be) for,
all reasonable out-of-pocket costs and expenses incurred by Citibank, SSBI,
Chase or JP Morgan (whether incurred on, before or after the date hereof) in
connection with the Facility and the preparation, negotiation, execution and
delivery of this Commitment Letter, including the reasonable fees and expenses
of Bracewell & Patterson, L.L.P., Davis, Polk & Wardwell, and Shearman &
Sterling and any reasonably required local counsel, in each case


                                       -3-




incurred on or before the closing date of the Facility, regardless of whether
any of the transactions contemplated hereby are consummated. The Borrower shall
also pay all reasonable out-of-pocket costs and expenses of Citibank, SSBI,
Chase and JP Morgan, as the case may be (including, without limitation, the
reasonable fees and disbursements of counsel), incurred in connection with the
enforcement of any of its rights and remedies hereunder.

Section 7. Confidentiality. By accepting delivery of this Commitment Letter,
each of the Borrower and Enron Corp. agrees that this Commitment Letter is for
the Borrower's and Enron Corp.'s confidential use only and that neither its
existence nor the terms hereof will be disclosed by the Borrower or Enron Corp.
to any person other than the Borrower's and Enron Corp.'s officers, directors,
employees, accountants, attorneys and other consultants or advisors, and then
only on a confidential and "need to know" basis in connection with the
transactions contemplated hereby; provided, however, that each of the Borrower
and Enron Corp. may make such other public disclosures of the terms and
conditions hereof as the Borrower is required by law or regulation, in the
opinion of the Borrower's or Enron Corp.'s counsel, to make (including, without
limitation, in response to any subpoena or court order) and each of the Borrower
and Enron Corp. may make disclosure hereof in response to a request of any
governmental authority having jurisdiction over the Borrower or Enron Corp., as
the case may be, and Enron may make a disclosure hereof (except for the Fee
Letter) in any form 8K filing with the SEC. Notwithstanding the foregoing, each
of the Borrower and Enron Corp. may disclose the Commitment Letter (except for
the Fee Letter) after the date that is two years from the date hereof.

Section 8. Representations and Warranties. Each of the Borrower, for itself
only, and Enron Corp. represents and warrants that (i) all information (other
than projections) that has been or will hereafter be made available to Citibank,
SSBI, Chase, JP Morgan, any other Lender or any potential Lender by the Borrower
or Enron Corp. or any of its representatives and that is included in any
information memo or similar document pertaining to the Facility is and will be
complete and correct in all material respects and does not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances under which such statements were or are made and (ii)
all projections, if any, that have been or will be prepared by the Borrower or
Enron Corp. and made available to Citibank, SSBI, Chase, JP Morgan, any other
Lender or any potential Lender in connection with the Facility have been or will
be prepared in good faith based upon reasonable assumptions (it being understood
that such projections are subject to significant uncertainties and
contingencies, many of which are beyond the Borrower's or Enron Corp.'s control,
and that no assurance can be given that the projections will be realized). Each
of the Borrower and Enron Corp. agrees to supplement the information and
projections from time to time until the earlier of the date the Operative
Documents become effective and December 31, 2001, so that the representations
and warranties contained in this paragraph remain correct.

In providing this Commitment Letter, each of Citibank, SSBI, Chase and JP Morgan
is relying on the accuracy of the information furnished to it by or on behalf of
the Borrower or Enron Corp. or any of its representatives or affiliates without
independent verification thereof.

Section 9. No Third Party Reliance, Etc. The agreements of each of Citibank,
SSBI, Chase and JP Morgan hereunder and of any other Lender that issues a
commitment to provide financing under the Facility are made solely for the
benefit of the Borrower and may not be relied upon or enforced by any other
person. Please note that those matters that are not covered or made clear herein
are subject to mutual agreement of the parties. Except as provided in the
Operative Documents, no party hereto may assign or delegate any of its rights or
obligations hereunder without the prior written consent of each of the other
parties hereto. This Commitment Letter may not be amended or modified except in
a written agreement signed by all parties hereto. This Commitment Letter is not
intended to create a fiduciary relationship among the parties hereto.

                                       -4-




The Borrower and Enron Corp. should be aware that Citibank, SSBI, Chase, JP
Morgan and/or one or more of their respective affiliates may be providing
financing or other services to parties whose interests may conflict with the
Borrower's or Enron Corp.'s interests. Consistent with the longstanding policy
of Citibank, SSBI, Chase and JP Morgan to hold in confidence the affairs of its
customers, neither Citibank, SSBI, Chase, JP Morgan nor any of their respective
affiliates will furnish confidential information obtained from the Borrower or
Enron Corp. to any of their other customers. Furthermore, neither Citibank,
SSBI, Chase, JP Morgan nor any of their respective affiliates will make
available to the Borrower or Enron Corp. confidential information that Citibank,
SSBI, Chase, JP Morgan or any such affiliate obtained or may obtain from any
other customer.

Section 10. Governing Law, Etc. This Commitment Letter shall be governed by, and
construed in accordance with, the law of the State of New York. This Commitment
Letter sets forth the entire agreement between the parties with respect to the
matters addressed herein and supersedes all prior communications, written or
oral, with respect hereto. This Commitment Letter may be executed in any number
of counterparts, each of which, when so executed, shall be deemed to be an
original and all of which, taken together, shall constitute one and the same
Commitment Letter. Delivery of an executed counterpart of a signature page to
this Commitment Letter by telecopier shall be as effective as delivery of an
original executed counterpart of this Commitment Letter. Sections 3 through 7
and 10 hereof shall survive the termination of any commitment hereunder. Each
party to this Commitment letter hereby irrevocably waive any right it may have
to a jury trial and, to the fullest extent it may effectively do so under
applicable law, (i) each of the parties hereto hereby irrevocably and
unconditionally to the non-exclusive jurisdiction of the Supreme Court of the
State of New York, Commercial Division, Civil Branch sitting in the Borough of
Manhattan and of the United States District Court of the Southern District of
New York, and any appellate court from any appeal thereof, in any action or
proceeding arising out of or relating to this Commitment Letter or the Fee
Letter or any other instrument or document furnished pursuant hereto or in
connection herewith or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of such action or proceeding may be heard and determined in
any such court; (ii) each of the parties hereto hereby irrevocably and
unconditionally waives the defense of an inconvenient forum to the maintenance
of such action or proceeding and any objection that it may now or hereafter have
to the laying of venue of any such action or proceeding in any such court; (iii)
the Borrower hereby agrees that service of copies of the summons and complaint
and any other process which may be served in any such action or proceeding may
be made by mailing or delivering a copy of such process to the Borrower at its
address specified above; and (iv) each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

Please indicate the Borrower's and Enron Corp.'s acceptance of the provisions
hereof by signing the enclosed copy of this Commitment Letter and the Fee Letter
and returning them to Chris Lyons, Salomon Smith Barney Inc., 1200 Smith Street,
Suite 2000, Houston, Texas 77002 (fax: 713 654-2849) and to George Serice, J.P.
Morgan Securities Inc., 700 Travis Street, 20th Floor, Houston, Texas 77002
(fax: 713 216-4583) at or before 5 p.m. (Houston time) on October 31, 2001, the
time at which the respective commitments hereunder of Citibank, SSBI, Chase and
JP Morgan (if not so accepted prior thereto) will terminate.


                                       -5-





If the Borrower and Enron Corp. elect to deliver this Commitment Letter by
telecopier, please arrange for the executed original to follow by next-day
courier.

Very truly yours,

SALOMON SMITH BARNEY INC.



By:
   -----------------------------------------
  Name:
  Title:

CITIBANK, N.A.



By:
   -----------------------------------------
  Name:
  Title:

THE CHASE MANHATTAN BANK



By:
   -----------------------------------------
  Name:
  Title:

J.P. MORGAN SECURITIES INC.



By:
   -----------------------------------------
  Name:
  Title:


                                       -6-





ACCEPTED AND AGREED on October 31, 2001:

NORTHERN NATURAL GAS COMPANY


By:
   -----------------------------------------
  Name:
  Title:

ENRON CORP.


By:
   -----------------------------------------
  Name:
  Title:






                                       -7-