Pacific Interstate Offshore Company

Second Revised Volume No. 1

Effective Date: 01/01/1994, Docket: RS92- 73-001, Status: Effective

Original Sheet No. 14 Original Sheet No. 14 : Effective

RATE SCHEDULE FT-1

FIRM TRANSPORTATION SERVICE (cont'd)

8. FACILITIES REIMBURSEMENT

Notwithstanding the exemption for the Santa Barbara

Channel contained in Section 1334 (f) (1) (B) of the

Outer Continental Shelf Lands Act, 43 USC Section 1334

(f) (1) (B), in the event that Transporter agrees that

new and/or expanded facilities, as provided for under

Part 157, Subpart F of the FERC's Regulations, are

required to accommodate receipt and/or delivery of gas in

order to render service pursuant to this Rate Schedule,

Transporter shall have the right to design and construct

such facilities, or in the alternative, to review the

design and monitor the construction of such facilities by

Shipper, assure that the quality of gas delivered to the

Transporter meets the standards as set forth in Section 2

of the General Terms and Conditions and determine that

the service provided hereunder would not detrimentally

affect the operation of Transporter's facility. Shipper

agrees to reimburse Transporter promptly upon receipt of

Transporter's invoices, for all costs and expenses

incurred by Transporter in connection with such design

and construction, including without limiting the

foregoing, any filing fees and permit costs associated

with such facilities.

Transporter shall have title to and the exclusive right

to operate and maintain all such new facilities.

9. GENERAL TERMS AND CONDITIONS

Unless otherwise expressly specified in this Rate

Schedule or by the executed FT-1 Transportation Service

Agreement, the General Terms and Conditions contained in

this Second Revised Volume No. 1 are applicable to this

Rate Schedule and are incorporated herein by reference

and made a part hereof.