Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 05/01/2002, Docket: RP01-190-002, Status: Effective

First Revised Sheet No. 640 First Revised Sheet No. 640 : Effective

Superseding: Original Sheet No. 640

RATE SCHEDULE UP-1

Kern River Firm Transportation Services

(Continued)

ARTICLE X - TITLE AND POSSESSION OF GAS

10.1 Possession of Gas and Responsibility. As between Transporter and

Shipper, Shipper shall be deemed to be in control and possession of the

Gas until it has been received by Transporter for Transportation at

Receipt Point(s). Transporter shall thereupon be deemed to be in

control and possession of the Gas until the Thermally Equivalent

Quantities (less any requisite fuel and loss reimbursement) shall have

been delivered to Shipper at the Delivery Point(s), after which Shipper

shall be deemed to be in control and possession. Shipper shall have no

responsibility with respect to any Gas after it has been received by

Transporter at the Receipt Point(s) on account of anything which may be

done, happen or arise with respect to said Gas, until the Thermally

Equivalent Quantities (less any requisite fuel and loss reimbursement)

are delivered to Shipper at the Delivery Point(s). Transporter shall

have no responsibility with respect to said Gas prior to its receipt by

Transporter at the Receipt Point(s), after its delivery to Shipper at

the Delivery Point(s) or on account of anything which may be done,

happen or arise with respect to said Gas prior to such receipt or after

such delivery.