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

Third Revised Volume No. 1

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

Second Revised Sheet No. 68 Second Revised Sheet No. 68 : Superseded

Superseding: First Revised Sheet No. 68

GENERAL TERMS AND CONDITIONS

(Continued)

18. ASSIGNMENT OF CAPACITY TO CUSTOMERS OF DOWNSTREAM PIPELINES

18.1 Eligibility. Subject to the procedures and conditions set forth in the

following subsections of this Section 18, any interstate natural gas pipeline

company that: (1) offers transportation service on a firm basis under Subpart

B or G of the Federal Energy Regulatory Commission's Regulations in 18 CFR Part

284; (2) owns and operates interstate pipeline facilities downstream from U-TOS'

facilities at Johnson's Bayou, Cameron Parish, Louisiana, and (3) holds firm

capacity on the U-TOS system under a Transportation Agreement with U-TOS, may

assign all such rights, or a part thereof, to its own firm customer(s) served

by its downstream facilities. Any such interstate pipeline shipper that seeks

to assign firm capacity rights is hereinafter referred to as an

"AssigningsShipper." The downstream firm customer to whom such rights are

assigned is hereinafter referred to as the "Replacement Downstream Shipper."

18.2 Limitations on Assignments. Any proposed assignment of capacity under this

Section 18 shall be subject to the following limitations:

(a) Qualification of Replacement Downstream Shipper. Any prospective

Replacement Downstream Shipper that would take assigned capacity must

qualify for such assignment under the requirements of subsection 18.5 of

this Section 18.

(b) Permanence of the Assignment. Any assignment of capacity shall be

permanent, and shall not be subject to recall by the Assigning Shipper.

no less than 100 Dth at any specific receipt point, and no more than the

Assigning Shipper is entitled to, by receipt point, delivery point, and in

total, under its Transportation Agreement with U-TOS.

(d) Terms and Conditions of Assignment. A Replacement Downstream Shipper that

takes assigned capacity must accept all of the terms and conditions of the

Assigning Shipper's Transportation Agreement with U-TOS, including the

remaining primary term thereof. A Replacement Downstream Shipper that

takes assigned capacity shall execute a Rate Schedule FT Transportation

Agreement with U-TOS covering use of the assigned capacity.

(e) Provision Regarding Continuing Obligation of Assigning Shipper. The

Assigning Shipper may request from U-TOS a release from its obligations

under the Assigning Shipper's Transportation Agreement with U-TOS; subject

to the approval of U-TOS' creditors to whom said Transportation Agreement

has been pledged, U-TOS shall act on Assigning Shipper's request for

release from its obligations on a non-discriminatory basis, and shall not

unreasonably withhold approval thereof. Inasmuch as the Replacement

Shipper must at all times meet U-TOS' creditworthiness standard under

Section 5 of this Tariff, the criteria for creditors' approval shall

generally be satisfied thereby, absent extenuating circumstances.