Texas Eastern Transmission Corporation

Sixth Revised Volume No. 1

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Effective Date: 04/01/1997, Docket: RP97- 3-002, Status: Effective

First Revised Sheet No. 531 First Revised Sheet No. 531 : Effective

Superseding: Sub Original Sheet No. 531

GENERAL TERMS AND CONDITIONS

(Continued)

with no payment required from Pipeline and without

recourse from any party. At Pipeline's discretion,

Pipeline has the option of either retaining the gas for

its own use or for disposing of it in accordance with

procedures contained in Section 8.3 of the General

Terms and Conditions.

(2) If Pipeline desires to retain the gas for its own use,

it shall be valued, for accounting purposes, at zero

cost.

(D) Existing Suspense Gas:

Suspense Gas existing prior to the effective date of this

provision shall be subject to the procedures of this Section

8.2, unless the parties agree otherwise. Suspense gas will

be deemed received on the first day of the production month

in which it was received on Pipeline's system.

8.3 Disposition of Excess Quantities

If Pipeline desires to auction the net excess quantities purchased

under Section 8.1 of the General Terms and Conditions or the quantities of

unclaimed Suspense Gas and gas not withdrawn pursuant to Section 2.2 of

Rate Schedule ISS-1 and retained under Section 8.2 of the General Terms and

Conditions or the net quantities available to Pipeline as a result of

over-realization of in-kind compensation pursuant to Section 15.6 of the

General Terms and Conditions, Pipeline shall post such quantities on the

LINKþ System on the fifth business day following the fifteenth of the

month. Pipeline shall accept bids only during the time period from 7:00

a.m. until 11:00 a.m. CT on the seventh business day following the

fifteenth of the month. Prior to 4:00 p.m. CT of the same day, Pipeline

shall notify the Customer submitting the highest bid; provided, however,

Pipeline reserves the right to reject all bids. When the gas is purchased

at auction, Customer must provide identification of the existing

transportation service agreement with Pipeline under which Customer shall

nominate, transport and deliver all gas by the end of the month following

the month in which the gas is purchased. Customer agrees to pay the

applicable transportation rate and a charge equivalent to the maximum ISS-1

Space Charge on the average daily balance for each month applicable to the

period beginning when the bid was accepted at auction and ending when the

quantity of gas is delivered. Customer further agrees that the gas is

subject to Section 8.1, prospectively from the date of Customer's purchase

pursuant to this Section 8.3, at the Point(s) of Delivery, net of the

accumulated equivalent ISS-1 Space Charge and subject to all penalties

contained in Pipeline's FERC Gas Tariff. All auction proceeds shall be

handled in accordance with Section 15.6.

8.4 Operational Balancing Agreements

(A) Any imbalances arising under any transportation agreement

between Customer and Pipeline that are attributable to

variances (1) between actual receipts of natural gas and

scheduled and confirmed receipts of natural gas at Point(s)