Cove Point LNG Limited Partnership

Second Revised Volume No. 1

Effective Date: 06/01/2003, Docket: CP01- 76-003, Status: Effective

Second Revised Sheet No. 105 Second Revised Sheet No. 105 : Effective

Superseding: First Revised Sheet No. 105

GENERAL TERMS AND CONDITIONS

(Continued)

1. DEFINITIONS (Continued)

1.41 "Retainage": The quantity of Natural Gas or LNG that Buyer shall provide and

Operator shall retain from quantities of Natural Gas or LNG received by Operator from

Buyer under all Rate Schedules, as described below, for Operator's fuel use and lost

and accounted for quantities. The standard fuel calculation using the retainage

(fuel) percentage shall be:

receipt quantity

-------------------------- - receipt quantity = retainage quantity

1 - (retainage percentage)

--------------------

( 100 )

The Retainage under Section 4 of Rate Schedules FTS, FPS-1, FPS-2 and FPS-3, Section

3 of LTD-1 and LTD-2, and Section 5 of ITS shall be assessed as a percentage of the

total quantities of Natural Gas or LNG received from Buyers under such Rate Schedules

for fuel used in plant operations (including fuel for liquefaction) and lost and

unaccounted for quantities. The Retainage collected during each Contract Year under

Section 4 of Rate Schedules FPS-1, FPS-2 and FPS-3 shall not exceed twenty and one-

half percent (20.5%) of Buyer's deliveries during the Contract Year and, as

applicable under Section 5(h) of Rate Schedules FPS-1, FPS-2 and FPS-3, twenty and

one-half percent (20.5%) of Buyer's Liquefied Gas Balance on April 16. The Retainage

percentages shall be established initially by Operator based upon Operator's best

estimate of anticipated operating requirements. NAESB Standard 1.3.28 provides that:

"For current in-kind fuel reimbursement procedures, fuel rates shall be made

effective only at the beginning of the month." Accordingly, Operator shall adjust

the Retainage percentages annually by filing with the Commission on or before March 1

to become effective April 1 or, if operating or other conditions require, at such

other times as Operator in its reasonable discretion determines an adjustment is

required to prevent excessive over or under recovery of Retainage, such adjustment to

become effective on the first day of the month occurring no earlier than thirty (30)

days after filing. Each Retainage filing shall establish revised percentages based

upon Operator's estimate of operating requirements for the succeeding twelve (12)

month period, as adjusted for quantities retained either over or under actual

quantities required by Operator during the preceding twelve (12) months.

Upon termination of service under each firm Rate Schedule, Buyer shall deliver to

Operator at Buyer's Receipt Point, Buyer's pro rata share of under-recovered

Retainage quantities from the effective date of Operator's most recent adjustment

filing through the date of termination or, as the case may be, Operator shall provide

Buyer at Buyer's Delivery Point, Buyer's pro rata share of any excess quantities

retained by Operator from the effective date of Operator's most recent adjustment

filing through the date of termination. Operator's currently effective Retainage

percentages shall be posted on Operator's EBB.