High Island Offshore System, L.L.C.

Third Revised Volume No. 1

Effective Date: 09/01/2000, Docket: RP00-439-000, Status: Effective

Second Revised Sheet No. 98 Second Revised Sheet No. 98 : Effective

Superseding: First Revised Sheet No. 98

GENERAL TERMS AND CONDITIONS

(Continued)

operator. The Designated Allocator shall submit predetermined allocations

(PDAs) to HIOS in accordance with this Section 7.

HIOS shall use the PDA's submitted by the Designated Allocator, and as

acknowledged by HIOS, to allocate underages and overages in the gas

volumes anticipated by HIOS based on confirmed nominations, at the

designated Receipt Point for each point of HIOS measurement. In the

event that the Designated Allocator has not submitted an acceptable PDA,

underages and overages will be allocated pro rata, to the extent

applicable, based on confirmed nominations.

HIOS may rely exclusively on the effective PDA's or on the pro rata

allocation (based on scheduled nominations) in the absence of an

effective PDA, in allocating the gas at each HIOS measurement point, and

such allocations shall be binding on the Shipper. No retroactive changes

to the PDA may be made unless HIOS, the Designated Allocator, and all

Shippers covered by the PDA agree. Further, HIOS shall not be liable to

any Shipper as a result of HIOS' reliance on any PDA methodology provided

herein and Shipper shall indemnify HIOS from and against any and all

losses, damages, expenses and claims as a result of HIOS' reliance on

such PDA methodology.

7.6 Predetermined Allocations. The Designated Allocator shall furnish HIOS

with a PDA, by completing the PDA Form set forth on Sheet No. 175 of this

Tariff after or during confirmation, but in any event, before the start

of the gas day. Such PDA shall specify how any underage and/or overage

from the scheduled nomination should be allocated. The PDA shall

include all Shippers that have scheduled nominations with HIOS at the

given metering Point. Examples of allocation methods that can be used

include percentages, pro rata, ranking, swing with specified shippers,

and Operator Provided Value. The same standard allocation methodologies

should be available for use at all points.

The Designated Allocator may submit the PDA in writing via mail,

facsimile, messenger or HIOS' Interactive Internet Website.