Transwestern Pipeline Company

Second Revised Volume No. 1

Effective Date: 01/01/2003, Docket: RP00-490-002, Status: Effective

Seventh Revised Sheet No. 70 Seventh Revised Sheet No. 70 : Effective

Superseding: Sixth Revised Sheet No. 70

GENERAL TERMS AND CONDITIONS

(Continued)

14. ASSIGNMENT

Any company which shall succeed by purchase, merger, or consolidation to the

properties, substantially as an entirety, of Transporter or of Shipper or of

Operator, as the case may be, shall be entitled to the rights and shall be

subject to the obligations of its predecessors in title under a Service

Agreement or Operator Balancing Agreement. Any party may, without relieving

itself of its obligations under such agreement, assign any of its rights

thereunder to a company with which it is affiliated, but otherwise no

assignment of such agreement, or of any of the rights or obligations

thereunder shall be made unless there first shall have been obtained the

consent thereto of Transporter, in the event of any assignment by Shipper or

Operator, or the consent thereto of Shipper or Operator, in the event of any

assignment by Transporter. These restrictions on assignment shall not in any

way prevent any party from pledging or mortgaging its rights under a Service

Agreement or Operator Balancing Agreement as security of its indebtedness.

15. OPERATOR BALANCING AGREEMENTS

15.1 All Operators of gas transportation, processing, treating,

production, or other facilities which either deliver gas into or

receive gas from Transporter's system (except for customers under

Rate Schedule FTS-2) must execute an Operator Balancing Agreement

("OBA") in the form contained in this Tariff. An OBA is a contract

between two parties which specifies the procedures to manage

operating variances at an interconnect.

15.2 Prior to execution of the OBA by an Operator, delivery of gas into

Transporter's system or receipt of gas from Transporter's system

shall constitute Operator's agreement to the terms of the OBA in this

Tariff.

15.3 Transporter may amend the OBA from time to time by filing, with the

Federal Energy Regulatory Commission, revisions to the form of

service agreement (Service Agreement-Form N).

15.4 The following Sections of these General Terms and Conditions of this

Tariff shall be applicable to Operator Balancing Agreements: Sections

1, 2, 4, 5, and 34.

15.5 Transporter will file with the Federal Energy Regulatory Commission

on a monthly basis, any supplemental provisions negotiated and made a

part of the Operator Balancing Agreement with any Operator.

Transporter shall post such changes on its Electronic Bulletin Board

each month for a period of seven (7) days.

15.6 All penalty revenues collected pursuant to the OBA's will be refunded to

shippers annually, based upon the ratio of each shipper's scheduled throughput

and the total system scheduled throughput.