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Original Sheet No. 249 Original Sheet No. 249 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

or Delivery Point, the capacity

available for such firm service at each

affected Point shall be prorated among

firm Shippers based upon quantities

nominated for firm service at the

affected Receipt Point(s) and Delivery

Point(s) for that Day.

(3) Mainline Capacity - When mainline

capacity available to be scheduled for

use among firm Shippers is less than the

quantity nominated and confirmed, the

mainline capacity available for such

firm service shall be prorated among

firm Shippers such that the quantity

available to be scheduled for a given

Shipper is the lesser of (i) that

Shipper's confirmed nomination and (ii)

the operational mainline capacity

multiplied by the quotient of that

Shipper's MDTQ, and the sum of the MDTQs

of each Shipper who nominated affected

firm service. Norte¤o agrees to offer

to enter into contracts to provide firm

service on a first-come, first-served

basis but only up to the prudent

operating limits of its system.

(4) Production and Gathering Capacity - When

production and gathering line capacity

available to be scheduled for use among

firm Buyers and Shippers is less than

the quantity nominated and confirmed,

the production and gathering line

capacity available for such firm

services shall be prorated among firm

Buyers and Shippers such that the

quantity available to be scheduled for a

given Buyer or Shipper is the lesser of

(i) that Buyer's or Shipper's confirmed

nomination and (ii) the operational

production and gathering line capacity

multiplied by the quotient of that

Buyer's or Shipper's MDTQ or MDCQ, as