U-T Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 06/01/1997, Docket: RP97-146-001, Status: Effective

Second Revised Sheet No. 35 Second Revised Sheet No. 35 : Superseded

Superseding: First Revised Sheet No. 35

GENERAL TERMS AND CONDITIONS

(Continued)

1.15 The term "Currently Effective Contract Demand" shall mean the aggregate of the

maximum daily volumes of Gas, expressed in Dth per day, which U-TOS is obligated

to accept for transportation for the account of each firm shipper under U-TOS'

F.E.R.C. Gas Tariff, Original Volume No. 2, and Third Revised Volume No. 1.

1.16 The term "System" shall mean the pipeline and related facilities at the time

owned by U-TOS.

1.17 The term "Unaccounted For Gas" shall mean the difference between the sum of all

input volumes of Gas to the System and the sum of all output volumes of Gas from

the System, which difference shall include but shall not be limited to

compressor fuel, Gas vented (other than Gas vented pursuant to Section 7.13) and

Gas used and accounted for in pipeline operations, and Gas lost as a result of

an event of force majeure, the ownership of which cannot be reasonably

identified, adjusted to such degree as is practicable for variations in Gas

volumes due to the transportation of Associated Liquids during any given period

of time.

1.18 The term "Maximum Daily Volumes" shall mean a Maximum Daily Volume (MDV) of Gas

and Associated Liquids, expressed in Dth, stipulated by Shipper and U-TOS from

time to time for delivery at each Point of Receipt, the aggregate of all such

stipulated MDVs at points of receipt not to exceed the MDQ.

1.19 The term "Operator" shall mean the entity selected by U-TOS and which has

entered into a service agreement with U-TOS to operate the U-TOS System.

1.20 The term "Authorized Overrun" shall mean nominations of a Shipper, in excess of

contract MDV's, that U-TOS is obligated to schedule and transport, to the extent

of available capacity, under Section 7.8 of the General Terms and Conditions.

1.21 The term "Unauthorized Overrun" shall mean a delivery of gas to any U-TOS

receipt point, by a U-TOS Shipper, without a nomination for service at that

receipt point, as authorized by U-TOS in whole or in part under the scheduling

provisions of Section 7 of the General Terms and Conditions.

1.22 The term "Spot Market Price" shall mean the cost of gas as reported in the

Natural Gas Week, Gas Price Report, Texas Gulf Coast, Offshore.

1.23 The term "Business Day" shall mean Monday through Friday, excluding Federal

Banking holidays.

1.24 The term "nomination period" shall mean that period of time that the Shipper

includes in a nomination for gas service. All nominations must include begin

and end dates which shall not exceed the term of the Shipper's contract, and

shall not be less than one day.

1.25 The term "Nominating Agent" shall mean the party, other than the Shipper, who

has been designated in writing by the Shipper to act as Shipper's agent in

providing nominations and nomination changes to the Transporter, and to be

responsible for all other nomination related activities. Transporter will

assume that the designated Nominating Agent will remain the same from month to

month, until otherwise changed or revoked in writing by the Shipper.