Venice Gathering System, L. L. C.

Original Volume No. 1

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Effective Date: 09/13/2000, Docket: RP00-541-001, Status: Effective

Substitute First Revised Sheet No. 152 Substitute First Revised Sheet No. 152 : Effective

Superseding: Original Sheet No. 152

GENERAL TERMS AND CONDITIONS

(Continued)

14.4 Right of First Refusal

For Firm Service Agreements made effective on or after March

27, 2000, the right of first refusal is only applicable to

contracts that have a term of one year or greater that are at the

maximum tariff rate. Firm Service Agreements executed prior to

March 27, 2000 that have a term of one year or greater will

include a right of first refusal even if they are at a discount

from the maximum tariff rate.

If the right of first refusal applies, VGS will

notify an existing Shipper of the best bid, if any, received

that VGS is willing to accept. Shipper must provide VGS

written notification, which may be transmitted by fax or

other similar electronic means, that it intends to exercise

its right of first refusal. Shipper shall have a specified

time, but not less than five (5) business days, within which

Shipper must match the best bid. In order to match the best

bid, Shipper must agree to pay a rate up to the maximum

rate, for an agreement term, not to exceed five (5) years,

that will provide VGS at least the same net present value.

If Shipper matches the best bid, VGS and Shipper will enter

into a new Firm Service Agreement, or modify the existing

Service Agreement, reflecting the terms of the best bid. If

Shipper fails to match the best bid within the time allowed

by VGS, Shipper's existing Firm Service Agreement will be

abandoned upon the termination of the Firm Service Agreement

and VGS will enter into a new Firm Service Agreement with

the Shipper(s) offering the best acceptable bid. The

highest rate that Shipper must match through the bidding

process if it wishes to continue such service is the Maximum

Rate.

14.5 Negotiated Rate

Shippers requesting service at a Negotiated Rate that

exceeds the Maximum Rate will be considered to be paying the

Maximum Rate for purposes of determining the economic value

of request(s) for service rights.