Horizon Pipeline Company, L.L.C.

Original Volume No. 1

Effective Date: 12/01/2003, Docket: RP02-153-005, Status: Effective

Substitute First Revised Sheet No. 135 Substitute First Revised Sheet No. 135 : Effective

Superseding: Original Sheet No. 135

GENERAL TERMS AND CONDITIONS

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circumstances. If Horizon determines that a waiver will not be granted, it

shall provide the Shipper with a written statement of the reasons for not

granting the waiver. Notwithstanding the foregoing, all deliveries

actually made to an LDC in a specific zone may be aggregated at its CDPs

for accounting purposes.

7.14 SEGMENTATION

(a) Commencing on December 1, 2003, a Shipper may segment

its firm capacity to the extent operationally feasible through the

nomination process. In addition, any Shipper may segment its firm capacity

by releasing one or more segments of that capacity (the releasing Shipper

may retain one or more segments of its capacity), to the extent

operationally feasible, by following the procedures set out in Section 15

of these General Terms and Conditions. In the case of segmentation through

release, the Original Shipper may segment by nomination any portion of the

capacity it retains to the extent operationally feasible and the

Replacement Shipper may segment by nomination any portion of the capacity

it obtains in the release to the extent operationally feasible.

(b) For the purposes of this Section 7.14 and subject to

the other provisions hereof, whether segmentation is through nomination or

results from the release of firm capacity on a segmented basis, the primary

path under an Agreement may be segmented, and segmentation may extend

outside the primary path to the extent consistent with this Sections 7.14,

and such segmentation shall be deemed operationally feasible unless:

(1) the segmentation would result in an increase in

firm contractual obligation by Horizon on any segment or portion of its

system (through an overlap of segments);

(2) the segmentation would result in a forward-haul

in a direction opposite to the primary path of the Agreement being

segmented, as further set out in (e) below [backhauls are also addressed in

(e) below]; or

(3) the segmentation is inconsistent with Section

7.13(c) of these General Terms and Conditions.

this Section 7.14, each segment shall have access to all secondary points

on Horizon's system, so long as Horizon's system is not zoned. Any point

which is outside the primary path for the segment shall be treated as out-

of-path secondary in relation to nominations for that segment. In the case

of a segmented release, if nominations result in an overlapping path,

through nomination at out-of-path secondary points, overrun charges