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

First Revised Sheet No. 56 First Revised Sheet No. 56 : Superseded

Superseding: Original Sheet No. 56

GENERAL TERMS AND CONDITIONS

(Continued)

16.5 Bidding Procedures. Any person that has prequalified as a prospective shipper

under the provisions of subsection 16.6 of this Section 16 ("Qualified Bidder")

may submit a bid that is consistent with the posted information ("Qualified

Bid") for available capacity. UTOS shall receive binding Qualified Bids for the

available capacity, or any portion thereof, for the entire period that the

information is posted. Qualified Bids may be communicated to U-TOS by mail,

facsimile, or U-TOS' Electronic Delivery Mechanism. The date of receipt will

be recorded for each Qualified Bid. A Qualified Bid must be submitted on the

U-TOS Qualified Bid Form, as set forth on Sheet Nos. 119-121 of this tariff, and

must include the following information:

(a) The legal name of the Qualified Bidder, and the name, title, address,

telephone number, and facsimile number of the individual responsible for

the Qualified Bid;

(b) The amount of capacity, by receipt point, delivery point, and in total,

that the Qualified Bidder proposes to take;

(c) The period of time that the Qualified Bidder proposes to take the

capacity; and

(d) The reservation charge that the Qualified Bidder proposes to pay for the

capacity.

U-TOS shall be under no obligation to accept or consider Qualified

Bids at less than the maximum reservation charge. However, U-TOS

will inform the Existing Shipper of the maximum bid that was

received, or the fact that no bids were received.

16.6 Qualification of Bidders. In order to qualify for available

capacity, a prospective shipper must first:

(a) Demonstrate, to U-TOS' reasonable satisfaction, that it is creditworthy in

accordance with Sections 2.2(k) and 5 of the General Terms and Conditions

of this tariff; and

(b) Provide to U-TOS a statement of its willingness and ability to: (1)

execute a Transportation Agreement for firm transportation service in

accordance with Rate Schedule FT of this tariff; and (2) become a party to

the Gas Allocation Agreement between U-TOS and its shippers.

In the interest of expediting U-TOS' creditworthiness review, a

prospective shipper may submit to U-TOS, at any time, the credit

evaluation materials described in Section 2.2(k) of the General Terms and

Conditions of this tariff. U-TOS reserves the right to request additional

or renewed credit evaluation materials at any time for the purpose of

reviewing a completed creditworthiness evaluation.

16.7 Provisional Payment to Ensure Bona Fide Bid. Each Qualified Bidder must also

submit with its Qualified Bid, as a demonstration of its bona fide intentions,

a check, payable to U-TOS, for the lesser of: (1) $10,000; or (2) three months'

reservation charge for the amount of capacity sought, at the maximum rate. In

the event that, upon completion of the right of first refusal procedures