El Paso Natural Gas Company

First Revised Volume No. 1-A

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Effective Date: 10/01/1993, Docket: RS92- 60-016, Status: Effective

1st Rev Sub Original Sheet No. 240F 1st Rev Sub Original Sheet No. 240F : Superseded

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

20. OPERATING PROVISIONS FOR FIRM TRANSPORTATION SERVICE (Continued)

20.11 Resolution of Imbalances (Continued)

(4) For any contract with an imbalance greater than

-15% but less than or equal to -20%, the volume

in excess of -15% will be purchased by El Paso

at 70% of the Index Price; and

(5) For any contract with an imbalance greater than

-20%, the volume in excess of -20% will be

purchased by El Paso at 60% of the Index Price.

(vi) At the time a Shipper is in a cash-out position

requiring payment to El Paso at the appropriate rate

set forth in Section 20.11(e)(iv) above and such

Shipper also has an Unauthorized Gas balance, as

such term is defined in Section 27.1 of these

General Terms and Conditions, such Unauthorized Gas

balance may be offset against the quantities due

El Paso within the same production basin and

adjusted to reflect the point at which the imbalance

is held. At the time of invoicing for the net

imbalance, El Paso shall appropriately invoice or

account for any production area charges and liquid

credits applicable to the unauthorized gas used as

an offset. This provision is not applicable to the

Unauthorized Gas retained as a penalty pursuant to

Section 27 of these General Terms and Conditions.

Prior to any offsets, El Paso at its option may

first offset any under or over-deliveries between

contracts with such Shipper.

Shipper or its suppliers shall be responsible for

reporting and payment of any royalty, tax, or other

burdens on natural gas volumes received by El Paso

and El Paso shall not be obligated to account for or

pay such burdens.

(f) Crediting of Revenues - For any net dollar amount

received net of gas and administrative costs from

cash-out assessed on El Paso or an affiliate of El Paso,

El Paso shall credit such net amount within 90 days of

the payment date to other Shippers on a pro rata basis in

accordance with the volumes transported for each Shipper.