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. 896 First Revised Sheet No. 896 : Effective

Superseding: Original Sheet No. 896

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 22 - MISCELLANEOUS (Continued)

22.7 Successor and Assigns. (Continued)

Service Agreement, defaulted, describing in reasonable detail such

alleged default, then Shipper shall, prospectively and effective as of

the date of receipt of Transporter's written notice, either (i) act as a

guarantor of such Assignee's financial obligations thereunder, or (ii)

reassume the obligations so assigned.

22.8 Nonexclusivity. Shipper hereby expressly reserves the right to continue

to negotiate agreements with other pipeline companies, including, but

not limited to, Wyoming-California Pipeline Company and Mojave Pipeline

Company, for transmission of Shipper's Gas to Kern County, California.

Transporter expressly acknowledges that Shipper may execute any

transportation agreement (including but not limited to, a letter of

intent, a memorandum of understanding, and an agreement subject to a

condition precedent) that is limited to become effective on the date the

Firm Transportation Service Agreement is terminated pursuant to the

provisions thereof, or limited to become effective only in the event it

becomes impossible for Transporter to fulfill its obligations under the

terms of the Firm Transportation Service Agreement. Transporter also

acknowledges that Shipper may execute any agreement that provides for

the transportation of Quantities of Shipper's Gas in addition to the

Transportation Maximum Daily Quantity.

22.9 Waiver of Defaults. No waiver by any party of any one or more defaults

by the other in the performance of any provisions of this Rate Schedule

or the Firm Transportation Service Agreement shall operate or be

construed as a waiver of any future default or defaults, whether of a

like or of a different character.

22.10 Exhibits. The exhibits to the Firm Transportation Service Agreement are

incorporated by reference as if set forth in full therein.

22.11 Reservation of Processing Rights. Shipper shall retain title to the

entire Gas stream Shipper delivers to Transporter, provided, however,

that oil or liquid hydrocarbons recovered from Shipper's Gas by

Transporter using conventional gravity separation facilities during

transportation shall become and remain the exclusive property