Midwestern Gas Transmission Company

Third Revised Volume No. 1

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Effective Date: 07/09/2004, Docket: RP04-325-000, Status: Effective

First Revised Sheet No. 438 First Revised Sheet No. 438 : Effective

Superseding: Original Sheet No. 438

MIDWESTERN GAS TRANSMISSION COMPANY

OPERATIONAL BALANCING AGREEMENT FOR PIPELINES

(For Use at Interconnections with Interstate Pipelines)

ARTICLE 3 - CORRECTION OF OPERATIONAL IMBALANCES

3.1 Corrections in Flow Rates During A Day - The Parties will be able to request

adjustments to actual deliveries or receipts at any time during the production day by

coordination between the Parties' gas dispatchers. Each Party will use reasonable

efforts to deliver or receive those changed quantities when the operating conditions

on each Party's system permits, taking into consideration the nominations made by

firm Shippers on each Party's system. In the event that an Interconnection Point(s)

is unable to achieve the scheduled flow rate, the Parties agree that swift corrective

action will be taken.

3.2 Corrections During the Month - Estimated metered quantities, or actual metered

quantities where available, may be used by Company for purposes of adjustments under

this Section on a daily basis during the Production Month to determine the estimated

Operational Imbalance at each Interconnection Point(s). Physical flow adjustments

will be made for daily imbalances within 72 hours of notice by Company unless

mutually agreed to otherwise. Company shall make the estimated Daily and Monthly

Operational Imbalance at each delivery or receipt meter available to Pipeline on or

before the third Business Day after each production day. In the event that a

capacity constraint occurs on either Party's pipeline system that results in

curtailment of quantities through an Interconnection Point(s), the Party on whose

system the constraint has occurred shall determine the reallocation of quantities to

the Shippers. Such change in allocation shall be confirmed electronically or in

writing pursuant to the provisions of Article 2 above. If the constraint occurs at

an Interconnection Point, the Party that operates the meter at an Interconnection

Point shall be deemed to have the constraint on its system. To the extent that a

Pipeline has a record of not meeting its balancing obligations, (i.e., in-kind,

make-up within 72 hours); Company will have a right to terminate this Agreement upon

30 days notice.

3.3 Corrections In Subsequent Periods - The physical flow at each Interconnection Point

each month will be determined and communicated by Company to Pipeline electronically

or in writing as soon as possible during the month following the month in question.

The Parties agree to "in kind" balancing between the pipelines when the imbalance at

the end of the month is within 1 percent of the total monthly Scheduled Quantities at

the meter. Any "in kind" imbalance carried over from the prior month will become

part of the current Monthly Imbalance. Any imbalance existing at the time of the

implementation of a new Pipeline Operational Balancing Agreement will be held

separately and settled independently. When the Monthly Imbalance is greater than

1 percent of the monthly Scheduled Quantities at the meter, the entire imbalance will

be cashed out in accordance with Rate Schedule LMS-PA in Company's FERC Gas Tariff,

unless the imbalance was caused by failure of Company to adjust flow control at the

meter, or unless the Parties agree otherwise.

3.4 Measurement of Operational Imbalance - Measurement of gas for all purposes shall be

in accordance with Company's FERC Gas Tariff.

3.5 Operational Integrity - Nothing in this Article 2 shall limit a Party's right to take

action as may be required to adjust deliveries of gas in order to alleviate

conditions that threaten the integrity of its system.