Venice Gathering System, L. L. C.

Original Volume No. 1

Effective Date: 01/01/1998, Docket: CP97-533-002, Status: Effective

Original Sheet No. 102 Original Sheet No. 102 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

10.2 Operational Balancing Agreements

VGS is willing to negotiate and execute an

Operational Balancing Agreement (OBA) with any Operator for

the purpose of minimizing operational imbalances or other

matters with respect to the receipt of gas into or the

delivery of gas from VGS' System. The OBA shall specify the

gas custody transfer procedures to be followed by VGS and

the Operator for the confirmation of nominated quantities

and allocation of quantities of gas measured at the point(s)

of interconnection between VGS and the Operator. The OBA

will provide that any variance between quantities of gas

measured and confirmed nominations for any day shall be

promptly resolved in-kind. To facilitate the determination

of variances on a timely basis, VGS and the Operator will

agree upon necessary measurement, allocation and accounting

procedures and set forth such procedures in the OBA. VGS

will post on its Internet Home Page the Receipt Points and

Delivery Points where an OBA governs the allocation of

quantities of gas measured.

10.3 Eligibility for an Operational Balancing

Agreement

VGS shall negotiate and execute OBAs on a

non-discriminatory basis with any Operator provided that VGS

shall not be obligated to negotiate and execute OBAs with

any Operator that:

a. is not credit worthy as determined

pursuant to Section 12.5 of the General

Terms and Conditions;

b. does not maintain, or have available,

dispatching operations that are staffed

on a continuous basis;