Tres Palacios Gas Storage LLC

Original Volume No. 1

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Effective Date: 08/01/2008, Docket: RP08-424-000, Status: Effective

Original Sheet No. 121 Original Sheet No. 121

GENERAL TERMS AND CONDITIONS

(Continued)

4.8 Qualification of Prospective Replacement Customer.

A prospective Replacement Customer must be on TRES PALACIOS'

approved bidders list before bids may be posted on the Internet

Web Site, must satisfy all requirements of the applicable Rate

Schedule and the General Terms and Conditions of this FERC Gas

Tariff and must have executed a Capacity Release Umbrella

Agreement. To be on the approved bidders list, the prospective

Replacement Customer must satisfy TRES PALACIOS' credit

requirements as outlined in Section 3 of the General Terms and

Conditions, and, if applicable, provide the information required

by Section 3 of the General Terms and Conditions. TRES PALACIOS

will apply its creditworthiness criteria to assess the submission.

Such credit appraisal shall be reevaluated and updated every three

(3) months. The prospective Replacement Customer shall remain on

the approved bidders list until such prospective Replacement

Customer (i) notifies TRES PALACIOS to the contrary, (ii) no

longer meets the credit qualifications established in Section 3 of

the General Terms and Conditions, or (iii) is suspended from the

approved bidders list in the event, and for such time as, such

Replacement or Prearranged Replacement Customer fails to pay part

or all of the amount of any bill for service in accordance with

Section 14 of the General Terms and Conditions. TRES PALACIOS

will waive the creditworthiness requirement on a non-

discriminatory basis for Replacement Customers and permit them to

submit bids, if the Releasing Customer provides TRES PALACIOS with

a guarantee or other form of credit assurance in form and

substance satisfactory to TRES PALACIOS of all financial

obligations of the Replacement Customer with respect to the

capacity being released by Releasing Customer prior to the

commencement of service to the Replacement Customer. TRES

PALACIOS shall not award capacity release offers to a prospective

Replacement Customer until and unless the Customer meets TRES

PALACIOS' creditworthiness requirements applicable to all services

that it receives from TRES PALACIOS, including the service

represented by the capacity release.

4.9 Nominations. Following its selection, and prior to

the flow of Gas, the Replacement Customer shall be permitted to

submit nominations pursuant to the terms and conditions of the

applicable Rate Schedule and the General Terms and Conditions of

this FERC Gas Tariff.

4.10 Billing. The Replacement Customer shall be billed

and make payments to TRES PALACIOS in accordance with the

applicable Rate Schedule, other provisions of this FERC Gas Tariff

and of its Storage Service Agreement incorporating its bid terms.

In accordance with the terms of the release, the Replacement

Customer shall pay or be liable for the usage charges (plus all

applicable surcharges, Fuel Reimbursement, taxes, penalties, etc.)

applicable under the relevant Rate Schedule attributable to its

usage of the released capacity. TRES PALACIOS shall continue to

bill the Releasing Customer all applicable charges under its

existing Storage Service Agreement, excluding usage charges (plus

all applicable surcharges, Fuel Reimbursement, taxes, penalties,

etc.) billed to the Replacement Customer and attributable to

Replacement Customer's usage of the released capacity. Invoices

sent to the Releasing Customer shall reflect a credit equal to any

reservation charges (plus all