Pacific Interstate Offshore Company

Second Revised Volume No. 1

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

Original Sheet No. 62 Original Sheet No. 62 : Effective

GENERAL TERMS AND CONDITIONS (cont'd)

17. CAPACITY RELEASE (Cont'd)

17.14 Prequalifications: Any person may request that

Transporter determine that it is qualified to be a

Replacement Shipper prior to submitting a bid to

purchase capacity. Such prequalification by

Transporter shall remain effective for six months

subsequent to the determination by Transporter. Any

person who has obtained a prequalification must

report any subsequent material adverse change in its

situation to Transporter, which shall then make a

new determination of that person's qualifications.

If Transporter determines that any Replacement

Shipper that obtained capacity on a prequalification

suffered a material adverse change in its situation

prior to obtaining capacity without reporting that

fact to Transporter, such Replacement Shipper must

immediately demonstrate to Transporter that it is

qualified to be a Replacement Shipper under

Transporter's tariff, or Transporter shall have the

right to terminate such Replacement Shipper's

Replacement Transportation Service Agreement.

17.15 Permanent Release: A Shipper may offer to make a

permanent release of capacity pursuant to the

procedures of Section 17.2 or 17.3 with the

Releasing Shipper fully released from all of its

obligations under its Transportation Service

Agreement. Transporter shall evaluate such offer on a

non-discriminatory basis.