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. 122 Original Sheet No. 122

GENERAL TERMS AND CONDITIONS

(Continued)

surcharges applicable thereto) being billed to the Replacement

Customer for the released capacity rights, or as otherwise agreed.

If the Replacement Customer fails to pay when due all or part of

the amounts credited to the Releasing Customer, TRES PALACIOS

shall pursue payment from the Replacement Customer by notifying

such Customer by registered letter, return receipt requested, that

it has five (5) days from receipt of such letter to pay the amount

due including any applicable interest. If the Replacement

Customer fails to pay such amount by the end of the fifth day,

TRES PALACIOS shall reverse the credit and bill the Releasing

Customer for such past due amounts, plus applicable interest.

4.11 Rights and Obligations of the Parties.

(a) The Storage Service Agreement between the Releasing

Customer and TRES PALACIOS shall remain in full force and effect

with the Releasing Customer to receive a credit to its invoice as

described in Section 4.10 above. If the Replacement Customer

fails to pay all or part of the amounts credited to the Releasing

Customer after the five Day notification period specified in

Section 4.10, TRES PALACIOS shall reverse the credit and bill the

Releasing Customer for such past due amounts, plus applicable

interest. The Storage Service Agreement executed by the

Replacement Customer shall be fully effective and enforceable by

and against the Replacement Customer. The Replacement Customer

may also release capacity pursuant to this Section, and in such

event and for such purposes, shall be considered the Releasing

Customer.

(b) TRES PALACIOS shall accept nominations, schedule

service, afford priority of service and interrupt service based on

instructions and communications from the Releasing Customer and

the Replacement Customer which are consistent with one another and

with the terms and conditions of TRES PALACIOS' FERC Gas Tariff

and their respective Storage Service Agreements. In the event

that instructions or nominations from the Releasing Customer and

Replacement Customer are, in TRES PALACIOS' opinion, inconsistent

or conflicting, TRES PALACIOS shall comply with the instructions

of the Releasing Customer; provided, however, that such

instructions must not be inconsistent with TRES PALACIOS' FERC Gas

Tariff or the terms of either the Releasing Customer's or

Replacement Customer's Storage Service Agreement, in TRES

PALACIOS' opinion. The Releasing Customer will indemnify TRES

PALACIOS against any claim or suit by the Replacement Customer,

its successors or assigns arising from any action taken by TRES

PALACIOS in reliance upon the Releasing Customer's nominations and

instructions and will hold TRES PALACIOS harmless for any action

taken by TRES PALACIOS in reliance upon the nominations and

scheduling instructions of the Replacement Customer; provided,

however, that the Releasing Customer shall not be liable for the

Replacement Customer's failure to pay the usage charges (plus all

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

billed to the Replacement Customer and attributable to its usage

of the released capacity. The Replacement Customer will indemnify

TRES PALACIOS against any claim or suit by the Releasing Customer,

its successors or assigns, arising from any action taken by TRES

PALACIOS in reliance upon the nominations and scheduling

instructions of the Replacement Customer and will hold TRES

PALACIOS harmless for any actions taken by TRES PALACIOS in

reliance upon the instructions of the Releasing Customer.