High Island Offshore System, L.L.C.

Third Revised Volume No. 1

Effective Date: 09/01/2006, Docket: RP06-244-001, Status: Effective

Substitute Second Revised Sheet No. 104 Substitute Second Revised Sheet No. 104 : Effective

Superseding: First Revised Sheet No. 104

GENERAL TERMS AND CONDITIONS

(Continued)

8. OPERATING TOLERANCES/IMBALANCES

It is recognized that the parties will be unable to control exactly the

quantities of Gas delivered and accepted hereunder on any day and that

deliveries by Shipper and redeliveries by HIOS may vary above or below the

quantities, respectively, nominated by Shipper and allocated by HIOS on any day.

8.1 Operating Tolerances. Variations between actual deliveries by Shipper

and actual redeliveries by HIOS shall be kept to the minimum permitted by

operating conditions and shall be balanced as soon as practicable but in

no event shall exceed an allowable daily variation of five (5) percent of

the scheduled quantities, and provided further that the cumulative net

variations during any month above or below the quantities scheduled shall

not exceed five (5) percent of the sum of the scheduled quantities for

each day of such month. The parties agree to use their best efforts to

correct any cumulative net variations from scheduled quantities as soon

as practicable. However it shall be the responsibility of the Shipper to

monitor and adjust deliveries of gas to HIOS to match scheduled

quantities.

If the monthly variation deviates from the allowable tolerances

referred to herein, Shipper, after receiving written notification from

HIOS of the variation deviating from such allowable tolerances, shall

have 10 days to eliminate such variation. If any such variation is not

brought within tolerances or suitable progress is not made toward

correcting the variation, to Transporter's satisfaction, within thirty

(30) days of notification to Shipper, HIOS may adjust scheduled