High Island Offshore System, L.L.C.

Third Revised Volume No. 1

Effective Date: 10/01/2002, Docket: RP02-434-000, Status: Effective

Second Revised Sheet No. 138 Second Revised Sheet No. 138 : Effective

Superseding: First Revised Sheet No. 138

GENERAL TERMS AND CONDITIONS

(Continued)

(iv) If, following identification of the highest-value

Qualified Bid or Prearranged Transaction, the capacity

that remains available for release under the Release

Proposal is greater than the capacity requested in the

Qualified Bid or Prearranged Transaction with the next

highest Net Present Value, then capacity shall also be

awarded to such next highest bid. This procedure shall

continue until the award of capacity to a Qualified Bid

or Prearranged Transaction with the next highest Net

Present Value would cause the remaining available

capacity under the Release Proposal to be exceeded.

17.7(c) Right of First Refusal of Prearranged Shipper. If the procedures

described in subsection 17.7(a) or 17.7(b) result in selection of

a Qualified Bid with a higher value than a Prearranged

Transaction for the same capacity, then HIOS shall provide the

Prearranged Shipper in the Prearranged Transaction with the terms

and conditions of such highest-value Qualified Bid. Such

information shall be communicated via HIOS' Interactive Internet

Website by 2:00 p.m. Central Time. If the Prearranged Shipper

elects to match the highest-value Qualified Bid, it shall inform

HIOS via HIOS' Interactive Internet Website by 3:00 p.m. Central

Time, of its unconditional agreement to match or exceed such

terms and conditions. A Prearranged Shipper that matches or

exceeds a highest-value Qualified Bid shall be granted the first

award of available capacity under the