High Island Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 07/01/2003, Docket: RP03-418-000, Status: Effective

Fifth Revised Sheet No. 130 Fifth Revised Sheet No. 130 : Effective

Superseding: Fourth Revised Sheet No. 130

GENERAL TERMS AND CONDITIONS

(Continued)

17.5(b) Releases Not Subject to Bidding

For (1) proposed capacity releases of a duration less than thirty

(30) consecutive days for which Releasing Shipper has obtained a

Prearranged Shipper; or (2) for proposed capacity releases for which

Releasing Shipper has obtained a Prearranged Shipper and the

Prearranged Shipper is paying the maximum rate and during the period

until September 30, 2002 the release term is one year or more, and

all other terms and conditions of the release are met, Releasing

Shipper shall notify HIOS by posting the information required by

subsection 17.4 of this Section 17, which information will be on

HIOS' Interactive Internet Website in accordance with the following

schedule:

(i) Timely Cycle

Posting of prearranged deals not subject to bid are due by

10:30 A.M.

(ii) Evening Cycle

Posting of prearranged deals not subject to bid are due by

5:00 P.M..

(iii) Intraday 1 Cycle

Posting of prearranged deals not subject to bid are due by

9:00 A.M.

(iv) Intraday 2 Cycle

Posting of prearranged deals not subject to bid are due by

4:00 P.M.

For each cycle, contracts will be issued within one hour of award

posting (with a new contract number, when applicable); nomination

possible beginning at the next available nomination cycle for the

effective date of the contract. (Central Clock Time)

The Prearranged Shipper must initiate confirmation of Prearranged

Transaction via HIOS' Interactive Internet Website. Nominations

submitted in accordance with this Section 17.5(b) will be processed

in accordance with the nomination and scheduling requirements of

Section 7 of the General Terms and Conditions of this Tariff. A

Prearranged Shipper may not consummate a release with any Releasing

Shipper without such release being subject to the bidding requirement

if such Releasing Shipper has, within the prior thirty (30)

consecutive days, released capacity to such Prearranged Shipper,

which prior release was not subject to the bidding requirements for

any reason other than the fact that the Prearranged Shipper was

paying the maximum rates for such prior release. All other

provisions of this Section 17 shall apply, including Releasing

Shipper's obligations under subsection 17.12 of this Section 17.