Great Plains Gasification Associates, A Partnership, Transco Coal Gas Company, A Partner Other Than The Tax Matters Partner - Page 20

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          million.11  The parties agreed to recommend that SFC’s board and            
          the partnership’s management committee approve this tentative               
          price guarantee agreement.                                                  
               In July 1984, while negotiations continued between the                 
          partners and SFC, the gasification plant began producing                    
          synthetic natural gas.                                                      
               In January 1985, the partnership received from SFC a draft             
          price agreement; a draft loan agreement was expected soon                   
          thereafter.  To enable the partnership to meet its obligations              
          under the loan guarantee obligation, the management committee               
          called, at monthly intervals, for additional equity contributions           
          of $4 million in February 1985, of $6 million in March 1985, of             
          $3 million in April 1985, and of $1 million in May and June 1985.           
          These additional equity contributions were based on the partners’           
          expectation that support for the project would be forthcoming and           
          their belief that the arrangement would be supported by DOE.                
               Bolstering that belief, in April 1985 DOE Assistant                    
          Secretary Mares appeared before SFC’s board of directors on                 
          behalf of newly named DOE Secretary John Herrington.  Mr. Mares             
          endorsed the understandings reached by SFC and the partnership.             

               11 A Comptroller General’s report to Congress on the status            
          of the Great Plains project as of Dec. 31, 1984, noted that over            
          the project’s life, the partners would realize a lower rate of              
          return on their equity investments even with the $790 million               
          price support arrangement because of the partners’ additional               
          equity contributions, accelerated debt repayment, and the profit-           
          sharing arrangement.                                                        

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