High Island Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 12/01/2007, Docket: RP08- 36-001, Status: Effective

Substitute Fourth Revised Sheet No. 173B Substitute Fourth Revised Sheet No. 173B : Pending

Superseding: Third Revised Sheet No. 173B

GENERAL TERMS AND CONDITIONS

(Continued)

28.3(b) Unaccounted For Gas. The Unaccounted For Gas percentage shall

be calculated annually as the quotient of a) the Unaccounted For

Gas experienced for the previous calendar year ending each

December 31 and b) the projected quantity of gas received by

HIOS for the account of Shippers during the recovery period.

HIOS shall include supporting workpapers.

28.3(c) Company Use True up. As part of each annual filing made

pursuant to this Section 28, HIOS shall calculate a Company Use

True up percentage each year as the quotient of a) the Company

Use Variance on the balance sheet of the company as of the end

of the previous calendar year, plus carrying charges, and b)

the projected quantity of gas received by HIOS for the account

of Shippers during the recovery period. HIOS shall include

supporting workpapers.

Notwithstanding the foregoing, HIOS shall mitigate any positive

Company Use true-up as provided herein. If, at the end of a

calendar year, HIOS has a negative Company Use Variance and

calculates a positive Company Use true-up pursuant to this

Section; and during the same calendar year utilized herein HIOS

realizes net positive cashout revenue as provided in Section

8.6 of these General Terms and Conditions; then HIOS shall

utilize such net positive revenues to either offset or purchase

Gas quantities and reduce or eliminate any such positive

Company Use true-up as provided below.

Each month HIOS shall record a) the costs or revenues and b)

the negative or positive quantities of CUV for that Month. At

the end of the calendar year, HIOS shall calculate an average

CUV price ("ACUVP") which shall equal the quotient of the net

costs of the CUV divided by the net negative quantities of the

CUV, both as reflected on the balance sheet of the company at

the end of such year. If electing to offset any positive

Company Use true-up, HIOS will reduce the costs and quantities

using the ACUVP. If electing to purchase quantities, HIOS

shall post a notice on its bulletin board soliciting bids for

the sale of the Gas and shall accept the bid(s) with the lowest

net cost to HIOS.

28.3(d) Company Use Percentage. The Company Use Percentage shall equal

the sum of the Compressor Fuel percentage, the Unaccounted For

Gas percentage and the Company Use True up percentage.

28.4 Interim Adjustment to Company Use Percentage. HIOS shall monitor the CUV

monthly. Each September, HIOS shall calculate the percentage relationship

of CUV to actual Company Use for the previous six (6) month period (i.e.

March - August). If the CUV is more than fifteen percent (15%) of the

actual Company Use, HIOS shall revise the Company Use Percentage to equal

the average monthly actual Company Use during such six (6) month period,

and shall file a tariff sheet and supporting workpapers with the Commission

as soon as final data for the months March through August is available, to

be effective the first day of the month following the filing, to implement

the revision in the Company Use Percentage. Such filing shall become

effective on the proposed effective date following a minimum suspension.