Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 11/01/1993, Docket: RS92- 8-004, Status: Effective

Original Sheet No. 243 Original Sheet No. 243 : Effective

GENERAL TERMS AND CONDITIONS

23. ASSIGNMENT OF THIRD-PARTY TRANSPORTATION CAPACITY

A. General. Northern shall make all of its third-party transportation capacity not

subject to the Reverse Auction as described in Section 22, or any unassigned capacity

at the conclusion of the Reverse Auction, available for assignment. All Third-Party

Capacity, as defined below, will be available for assignment.

B. If a Shipper takes assignment of a transportation agreement between Northern and a

Third-Party, such Shipper shall be responsible for all obligations thereunder related

to such contract from the effective date of the assignment. Assignment under this

Section excludes the gas supply behind the capacity. For purposes of this Section

23, "Third-Party Capacity" shall include transportation capacity that Northern holds

(or, in the case of TransCanada Pipe Line Limited or Many Islands Natural Gas, held

by others and is subject to direction by Northern) on the following pipelines: UT

Offshore System, ANR, Columbia Gulf, HIOS, Sea Robin, Texas Eastern, Trunkline,

Questar Pipeline Company, Wyoming Interstate Company, Ltd., Trailblazer Pipeline

Company, Great Lakes Gas Transmission Limited Partnership, Many Islands Natural Gas

(Canada) Limited, TransCanada Pipe Line Limited and Northern Border Pipeline.

C. Northern shall offer assignment of Third-Party Capacity as follows:

1) First, each Shipper that was a sales customer that has converted to firm

throughput (converted sales customer) will be allowed to take its pro rata share

of any Third-Party Capacity.

2) Any Third-Party Capacity not taken by converted sales customers will be made

available to any creditworthy party, excluding Northern as merchant. In the event

more than one party wishes to take assignment of the same Third-Party Capacity,

Northern shall allocate the capacity on a pro rata basis.

3) All unassigned Third-Party Capacity costs will be treated as Stranded Account No.

858 Costs as described in Section 24 of these GENERAL TERMS AND CONDITIONS.

D. Not withstanding C above, to the extent there is any commitment to permit a specific

party to take assignment of third party capacity then Northern shall give priority to

such party prior to offering such third party capacity for assignment. Additionally,

capacity will only be made available for assignment to the extent that assignment is

consistent with Northern's obligations under the related unassigned gas supply

contracts, and to the extent there is a commitment to bundle the Third-Party Capacity

with any associated gas supply contract, then Northern shall give priority to any

party willing to take assignment of the supply contract and the related Third-Party

Capacity as a package. Assignments, releases or other use of the Canadian and Great

Lakes capacity that historically has been used to transport Northern's Montana

supplies are subject to any pre-existing contractual right which a party may have

with respect to all or a portion of such capacity, including the right to use that

capacity and to take assignment of it.

To the extent that any portion of such gas supply contract remains unassigned,

Northern will give preference in the assignment of the related Third-Party Capacity

to any supplier which has the right to take assignment of such Third-Party Capacity

under Northern's gas supply contract.

E. Northern will convert remaining unassigned Third-Party Capacity to Part 284

transportation where such conversion is cost effective and to the extent it is

consistent with Northern's obligations under its unassigned gas supply contracts.

In such event, Northern will exercise any capacity release rights it may have with

respect to the Third-Party Capacity to mitigate Stranded Account No. 858 Costs.

In the event any capacity is not converted to Part 284 transportation, such capacity,

whether held in Northern's name or held on behalf of Northern by others, shall be

treated as an extension of Northern's system for use pursuant to Section 23A hereof.