Panhandle Eastern Pipe Line Company, LP

THIRD REVISED VOLUME NO. 1

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Effective Date: 09/13/2004, Docket: RP04-454-000, Status: Effective

Original Sheet No. 230F Original Sheet No. 230F : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

(d) Buyout

(1) Eligibility

Shipper may elect to reduce some or all of the

contract quantity on its firm Service

Agreement(s) by making one or more of the

following cash payments to Panhandle.

The total amount of the cash payment that

Shipper must pay Panhandle shall be 100 percent

of the net present value of the reservation

charge payments applicable to the reduced

quantities that Panhandle would have otherwise

received had Shipper continued to pay Panhandle

under the remaining term of the Service

Agreement. The economic value shall be

calculated in accordance with Section 7.1(b)

hereof.

(2) Notice

Shipper shall give Panhandle sixty (60) days

prior written notice of the date it elects to

exercise this contract quantity reduction

option.

(3) Level of Reduction

Unless otherwise agreed, any reduction in

contract quantity shall result in a pro rata

reduction in Shipper's quantities at primary

Points of Receipt and primary Points of

Delivery.

(4) Effective Date

The reduction shall take effect on the requested

date following the sixty (60) days notice

period. The payment required under Section

7.6(d)(1) must be received by Panhandle prior to

the effective date of the reduction.