Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 10/01/2006, Docket: RP06-517-000, Status: Effective

Second Revised Sheet No. 200 Second Revised Sheet No. 200 : Effective

Superseding: First Revised Sheet No. 200

GENERAL TERMS AND CONDITIONS

(Continued)

26. SEGMENTATION

A firm Shipper may segment its mainline capacity into separate parts for

its own use or for the purpose of temporarily releasing a geographic

portion of its capacity to another Shipper.

26.1 Segmentation without Capacity Release.

(a) A Shipper may segment its mainline capacity into separate

parts for its own use at any point on Transporter's mainline

and may nominate up to its current TMDQ in any segment.

(b) A Shipper also may segment its mainline capacity at any

point on Transporter's mainline, up to its DMDQ in any

segment, into separate Transportation Service Agreements

("Segmented Agreements") for its own use. Each Segmented

Agreement will be effective for a specified period of time.

Such agreement may have primary Receipt Point and primary

Delivery Point entitlements up to Shipper's current TMDQ,

but Shipper will have the right to use any available

alternate Receipt and Delivery Points on a secondary firm

basis, provided that Shipper's total nominations for any

portion of Transporter's mainline cannot exceed Shipper's

current TMDQ under the applicable agreement.

Shipper will pay Reservation/Demand charges on the DMDQ set

forth on the Transportation Service Agreement before it is

segmented ("Base Transportation Service Agreement"), but

will not be obligated to pay Reservation/Demand charges on

the Segmented Agreements. All other charges, including

Commodity/Usage charges, surcharges and fuel will be paid on

the Base Transportation Service Agreement, as well as on the

Segmented Agreements.