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. 155 Original Sheet No. 155

GENERAL TERMS AND CONDITIONS

(Continued)

31. CREDITWORTHINESS - FINANCIAL ASSURANCES

31.1 "Acceptable Credit Rating" means a Credit Rating

for which Customer's Unsecured Collateral Limit is greater than

Customer's Credit Exposure.

31.2 "Credit Rating" means the rating given to Customer's

unsecured long term debt by Standard and Poor's Corporation

("S&P") or Moody's Investor Services, Inc. ("Moody's "). If both

S&P and Moody's have issued a Credit Rating to Customer, the lower

rating shall apply for purposes of this FERC Gas Tariff.

31.3 "Credit Exposure" means an amount equal to: (1) in

the case of Firm Storage Services to be provided by TRES PALACIOS

using existing facilities, reservation charges payable at the rate

specified in Customer's bid for service or Storage Service

Agreement for a period of three (3) Months or the duration of the

Customer's bid or Storage Service Agreement, whichever is shorter;

(2) in the case of Interruptible services to be provided by TRES

PALACIOS using existing facilities, the Interruptible charge(s)

calculated on a one hundred percent (100%) load factor basis

payable for a period of three (3) Months or the duration of the

Customer's Storage Service Agreement, whichever is shorter; or (3)

for service that requires TRES PALACIOS to construct new

facilities, an amount determined by TRES PALACIOS prior to the

start of construction that is reasonable in light of the risks of

the construction project, not to exceed Customer's proportional

share of the cost of the facilities to be constructed (which

amount shall be reduced as Customer pays off the obligation for

construction of new facilities); plus, for each of (1), (2) and

(3), the Market Value of Loaned Gas.

31.4 "Market Value of Loaned Gas" means the Customer's

Loan Balance for service under Rate Schedules FL and IL, if any,

multiplied by the sum of the NYMEX Henry Hub Swap and the NYMEX

Tennessee Zone Zero Basis Swap, as posted on the www.nymex.com web

site, for the period under which the loaned gas is scheduled to be

returned pursuant to the Customer's Storage Service Agreement(s).

TRES PALACIOS shall calculate Customer's Market Value of Loaned

Gas on a daily basis.