Norteño Pipeline Company

First Revised Volume No. 1

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

Original Sheet No. 247 Original Sheet No. 247 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

on a firm basis under Sales Rate Schedules or

Transportation Rate Schedules. So far as

operating conditions will permit, available

natural gas shall be dispatched in accordance with

the aforementioned priority and operating

guideline, in as equitable a manner as possible.

15.5 Curtailment Over-Run Penalty - If, during any

curtailment which Norte¤o does not terminate prior

to its originally announced expiration date, Buyer

or Shipper takes, without Norte¤o's advance

approval, a quantity of natural gas in excess of

the curtailment quantity allocated to such Buyer

or Shipper, said quantity shall constitute a

Curtailment Over-Run quantity; provided however,

that no gas delivered at any point where Norte¤o

has complete and unrestricted control of gas

deliveries shall be considered a Curtailment

Over-Run quantity. If Shipper or Buyer does not

correct the excess takes within 48 hours of notice

by Norte¤o thereto of such excess takes, for each

MMBTU of such Curtailment Over-Run quantity taken

by such Buyer or Shipper, that Buyer or Shipper

shall pay to Norte¤o a penalty of ten dollars

($10.00); provided, however, that Norte¤o shall

have the right, without the obligation, to waive

any penalty for a Curtailment Over-Run quantity

under this Section 15.5, to the extent that such a

waiver is not unduly discriminatory if for the

period for which the penalty was incurred,

deliveries to Norte¤o's other Buyers or Shippers

were not adversely affected by the taking of such

Curtailment Over-Run quantity and if Norte¤o's

pipeline operations were not impaired thereby.

The payment of a penalty for a Curtailment

Over-Run shall not under any circumstances be

considered as giving any such customer the right

to take any Curtailment Over-Run quantity; nor

shall such payment be considered as a substitute

for any other remedies available to Norte¤o or

other Buyer or Shipper against the offending

Buyer or Shipper for failure to adhere to its

obligations under the provisions of this Section

15.