High Island Offshore System, L.L.C.

Third Revised Volume No. 1

Effective Date: 10/01/2007, Docket: RP06-540-004, Status: Effective

Fifth Revised Sheet No. 134 Fifth Revised Sheet No. 134 : Effective

Superseding: Substitute Fourth Revised Sheet No. 134

GENERAL TERMS AND CONDITIONS

(Continued)

charge, or higher if applicable pursuant to Section 17.2(e)

hereof, shall be deemed to include all non-commodity based

charges provided under HIOS' tariff for the capacity to be

released, including, but not limited to, any F.E.R.C. Order No.

636 transition costs attributable to the capacity to be released.

Unless the Qualified Bid states otherwise, a Qualified Bid for a

reservation charge less than HIOS' maximum reservation charge

shall not include any such non-commodity based charges not

directly included in the reservation charge stated in HIOS'

tariff.

17.6(g) The Qualified Bid must commit to payment of the maximum

commodity charge for Rate Schedule FT-1 or FT-2 service, as set

forth on Sheet No. 10 of this Tariff, in connection with use of

the capacity to be released, as well as all other applicable

add-on charges and surcharges under HIOS' tariff, including, but

not limited to, the ACA charge and any F.E.R.C. Order No. 636

commodity-based transition cost recovery surcharge.

17.7 Bid Selection Procedures

17.7(a) HIOS shall rank all bids and select the "best bid" or "better

offer" as defined in Section 17.7(b) from among the bids

received. However, if more than one bidder submits the "best

bid" or "better offer", the first bidder in time, inclusive of

the Prearranged Shipper, shall be selected and posted as the

"best bid" or "better offer", unless the Releasing Shipper

specifies another tie-breaking methodology in its Release

Proposal. If multiple bids meeting minimum conditions have been

submitted, bids shall be awarded best bid or better offer first,

until all offered capacity is awarded. Any bid submitted for

released capacity