Tres Palacios Gas Storage LLC

Original Volume No. 1

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Effective Date: 08/01/2008, Docket: RP08-424-000, Status: Effective

Original Sheet No. 105 Original Sheet No. 105

GENERAL TERMS AND CONDITIONS

(Continued)

3. REQUEST FOR SERVICE

3.1 Procedures for Sale of Capacity.

(a) Sale of Capacity. Upon the availability of new

storage capacity resulting from an expansion of TRES PALACIOS'

facilities, TRES PALACIOS shall sell such capacity to prospective

Customers either via the open season procedures described in

Sections 3.1(b)-(f) below or via the first-come, first-served

procedures described in Section 3.1(g) below, with the selection

of the procedures being at TRES PALACIOS' sole option. This

Section 3.1 shall apply to sales of capacity under Rate Schedules

FSS, NNSS, FP and FL.

(b) Notice of open season. If TRES PALACIOS elects to

conduct an open season pursuant to Section 3.1(a) above, TRES

PALACIOS shall post notice of the open season on its Internet Web

Site. Such notice shall set forth when the open season begins and

ends, the type of service being offered, how and where interested

parties may submit requests for service, the criteria that will be

used to evaluate bids ("Bid Evaluation Procedures"), and

additional details about the open season.

(c) Duration. An open season held pursuant to

Section 3.1(b) above shall be held for a period of not less than

five (5) Business Days. During this time, TRES PALACIOS will

accept bids from potential Customers for the service identified in

the notice of the open season.

(d) At the conclusion of the open season, the value

of each submitted bid will be determined according to the Bid

Evaluation Procedures. TRES PALACIOS reserves the right to reject

any bid which (i) may detrimentally impact the operational

integrity of TRES PALACIOS' facility, (ii) yields an economic

value that is unacceptable to TRES PALACIOS, (iii) does not

satisfy all of the terms of a specific open season, (iv) does not

contain all of the required information specified in the notice of

the open season, (v) contains terms and conditions other than

those contained in TRES PALACIOS' FERC Gas Tariff, and/or (vi)

does not meet TRES PALACIOS' creditworthiness requirements set

forth in Section 3.3 of these General Terms and Conditions. If

TRES PALACIOS rejects any request for available capacity posted

pursuant to this Section 3.1(d), TRES PALACIOS will notify the

potential Customer that submitted the rejected bid of the

reason(s) for such rejection via e-mail.

(e) During the allocation process at the conclusion

of an open season, storage capacity will be allocated to the

acceptable bid(s) in accordance with the Bid Evaluation

Procedures.