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1st Rev 1st Sub Original Sheet No. 280 1st Rev 1st Sub Original Sheet No. 280 : Superseded

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

27. UNAUTHORIZED GAS (Continued)

27.9 Challenging El Paso's Classification of Unauthorized Gas - Any

party claiming an interest in volumes of natural gas which

El Paso has determined to be Unauthorized Gas may challenge

that determination by the first day of the month following

receipt from El Paso of the notice of Unauthorized Gas. Such

challenge shall be in writing and include all documentation

upon which such party relies to substantiate its challenge.

El Paso shall hold such gas until a final determination has

been reached as to the classification of the gas in question.

If no such challenge is received by El Paso within the period

specified, then El Paso's determination that the quantities in

question were Unauthorized Gas shall be final. Upon a

determination that El Paso incorrectly classified natural gas

as unauthorized, El Paso shall correct all records and make

gas available, subject to operational conditions, within sixty

(60) days of such determination.

27.10 Accounting for Retained Unauthorized Gas and Penalties -

El Paso shall record the value of the Unauthorized Gas

retained (pursuant to Sections 27.2 and 27.6(b) of this

tariff) and the penalty payments received by El Paso (pursuant

to Section 27.6(a) of this tariff) in the appropriate revenue

account. The Unauthorized Gas volumes retained shall be

valued at the lesser of the value determined for the month the

Unauthorized Gas is retained or for the month the proceeds

from the retained Unauthorized Gas are to be credited to

eligible Shippers. The value of such retained Unauthorized

Gas shall be based on the appropriate index price for each

production basin (Anadarko, Permian or San Juan). Such

calculation shall be in accordance with Sections

20.11(e)(i)(1), (2) or (3), respectively, of this tariff.

Any Shipper who has a valid Transportation Service Agreement

providing for mainline transportation services shall be

eligible to receive a share of the value of the Unauthorized

Gas volumes retained (less production area charges and other

burdens, if any) and penalty payments received by El Paso.

The Shipper's share shall be credited to the monthly

transportation service invoice rendered by El Paso not later

than 90 days after the month of retention or payment of the

penalty. El Paso shall credit each Shipper in proportion to

the mainline charges billed to that Shipper less conditional

credits pursuant to Section 28.18 of this tariff to the

mainline charges billed to all Shippers in the month of

crediting less such conditional credits.