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First Revised Sheet No. 61 First Revised Sheet No. 61 : Superseded

Superseding: Substitute Original Sheet No. 61

GENERAL TERMS AND CONDITIONS

(Continued)

(i) Release Proposals for a term of less than five months must be posted

on U-TOS' Electronic Delivery Mechanism no later than 1:00 p.m.

Central Time on the business day prior to the nomination deadline

applicable to the effective date of the release and shall remain

posted for a minimum one hour Bidding Period that closes at 2:00

p.m. Central Time on a business day but not later than the business

day prior to the nomination deadline.

(ii) Release Proposals for a term of five months or more must be posted

no later than 1:00 p.m. Central Time four business days prior to the

nomination deadline applicable to the effective date of the release

and shall remain posted for a minimum three business day Bidding

Period that closes at 2:00 p.m. Central Time on a business day but

not later than the business day prior to the nomination deadline.

(iii) Within one hour (by 3 p.m. Central Time) after the close of the

Bidding Period specified in (i) and (ii), above, best bids shall be

determined, ties shall be broken, contingencies eliminated and U-TOS

shall notify any Prearranged Bidder of any competing bid that has a

value determined in accord with Section 17.7 which is higher than

the bid of the Prearranged Bidder. Following such notification, the

Prearranged Bidder shall have until 4 p.m. Central Time to match the

bid with higher value. U-TOS shall post the award of capacity by 5

p.m. Central Time, on its Electronic Delivery Mechanism. U-TOS

shall tender a contract (with a contract number) to the winning

bidder by 10:00 a.m. Central Time on the day of the nomination

deadline applicable to the effective date of the release.

Nominations by the winning bidder may be submitted for the next gas

flow day or at the time otherwise specified for intraday

nominations, in accordance with Section 7 herein.

(b) Releases Not Subject To Bidding.

Proposed capacity releases of a duration less than thirty (30) consecutive

days for which Releasing Shipper has obtained a Prearranged Shipper or for

proposed capacity releases of any duration for which Releasing Shipper has

obtained a Prearranged Shipper and the Prearranged Shipper is paying the

maximum rate and all other terms and conditions of the release are met,

Releasing Shipper shall notify U-TOS by providing the information pursuant

to subsection 17.4 of this Section 17, which information will be posted on

U-TOS' Electronic Delivery Mechanism by 9 a.m. Central Time on the day

prior to the effective date of the release. U-TOS will finalize all

contractual arrangements by 10:00 a.m. Central Time on the day prior to

the effective date of the release. The Prearranged Shipper must initiate

confirmation of the Prearranged Transaction via U-TOS' Electronic Delivery

Mechanism. Nominations may be submitted upon the finalization of all

contractual arrangements, and such nominations will be processed in

accordance with the nomination and scheduling requirements of Section 7 of

the General Terms and Conditions, however, in no circumstance will gas

flow prior to the effective date of the release as specified in Releasing

Shipper's Notice. A Prearranged Shipper may not consummate a release with

any Releasing Shipper without such release being subject to the bidding

requirement if such Releasing Shipper has, within the prior thirty (30)

consecutive days, released capacity to such Prearranged Shipper, which

prior release was not subject to the bidding requirements for any reason

other than the fact that the Prearranged Shipper was paying maximum rates

for such prior release. All other provisions of this Section 17 shall

apply, including Releasing Shipper's obligations under subsection 17.12 of

this Section 17.