High Island Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 04/01/2000, Docket: RP99-227-004, Status: Effective

Original Sheet No. 34 Original Sheet No. 34 : Effective

Rate Schedule FT-2

Firm Transportation Service

(Continued)

that it has an effective contractual right to acquire title

for the life of the reserves; and (ii) that it has entered

into all necessary arrangements to assure that the upstream

and/or downstream transportation will be in place prior to

the commencement of service. HIOS shall not be obligated to

provide service at any requested Point of Receipt or

Delivery without sufficient information to support the

certification made in (ii) above.

v. Prepayment. Requests for firm transportation hereunder must

be accompanied by a prepayment in the amount of the lesser of

the first three months' reservation charge or $200,000, pro-

vided however that HIOS may, in its sole discretion, waive

such prepayment on a non-discriminatory basis. The prepayment

of the reservation charge shall be credited to Shipper's first

months of service, or it shall be refunded following either a

determination that HIOS is unable to provide service or the

FT-2 Agreement tendered to Shipper is not executed within 30

days.

6. MAXIMUM DAILY QUANTITY ADJUSTMENTS

6.1 Prior to the initiation of service under Shipper's FT-2 Agreement,

HIOS may request an update of the production profile submitted in

accordance with Section 5 above. Thereafter, at least six (6) months

prior to the beginning of each full calendar year during which

Shipper's FT-2 Agreement is in effect, Shipper shall update its

production profile, if so requested by HIOS, to support its MDQs and,

when available, provide an actual production history for its

Committed Lease(s) and an update of its technical data, which may be

used by HIOS in evaluating the reasonableness of Shipper's proposed

MDQs for each Delivery Period. HIOS may, in its sole discretion,

waive the requirement to update production profiles during the first

two full calendar years during which Shipper's FT-2 Agreement is in

effect. Shipper shall reduce its MDQs as may be appropriate based on

the updated production profile throughout the life of the lease.

MDQs may be increased based on the updated production profile only to

the extent firm capacity on the system is available and not

previously committed to another Shipper as determined by HIOS

hereunder. If firm capacity is not available, Shipper may request

that such MDQ increase supported by its production profile update be

placed in HIOS' firm service queue, and HIOS will place it in the

firm service queue as a pending request as of the date of Shipper's

update. HIOS shall have the right to require Shipper to reduce its

MDQs based on an updated production profile, and HIOS and Shipper

shall amend