Norteño Pipeline Company

First Revised Volume No. 1

Effective Date: 04/01/1996, Docket: CP96- 81-007, Status: Effective

Original Sheet No. 243 Original Sheet No. 243 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

12. POSSESSION OF GAS AND RESPONSIBILITY:

12.1 Gas Sales Service - As between Norte¤o and

Buyer, Norte¤o shall be in control and possession

of the gas and responsible for any damage or

injury caused thereby until the same shall have

been delivered to Buyer at the Delivery Points,

after which Buyer or Shipper shall be deemed to be

in control and possession thereof and responsible

for any injury or damage caused thereby.

12.2 Transportation Service - As between Norte¤o and

Shipper, Norte¤o shall be deemed to be in control

and possession of the gas from the time it is

delivered to Norte¤o at the Receipt Point(s) until

it is redelivered to Shipper at the Delivery

Point(s), and Shipper shall be deemed to be in

control and possession of the gas at all other

times. The party which is in possession and

control of the gas shall be responsible for all

injury or damage caused thereby.

13. WARRANTY OF TITLE:

13.1 Gas Sales Service - Norte¤o warrants that it will

at the time of delivery have good title to all gas

delivered by it pursuant to the Sales Rate

Schedules, free and clear of all liens,

encumbrances and claims whatsoever, that it will

at such time of delivery have good right and title

to sell said gas as aforesaid, and that it will

indemnify Buyer and save it harmless from all

suits, actions, debts, accounts, damages, costs,

losses and expenses arising from or out of adverse

claims of any or all persons to said gas or to

royalties, taxes, license fees or charges thereon,

which are applicable before the title to the gas

passes to Buyer or Shipper. In the event any

adverse claim of any character whatsoever is

asserted against Buyer in respect to any of said

gas, Buyer or Shipper may retain the purchase

price thereof up to the amount of such claim

against it without interest until such claim has

been finally determined, as security for the