NorAm Gas Transmission Company

Fourth Revised Volume No. 1

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Effective Date: 11/01/1997, Docket: RP96-200-026, Status: Effective

First Revised Sheet No. 7M First Revised Sheet No. 7M : Superseded

Superseding: Original Sheet No. 7M

STATEMENT OF NEGOTIATED RATES

Contract Rate Contract

Shipper Name Number Schedule Demand Rate Receipt Point(s) Delivery Point(s)

------------ -------- -------- -------- ----------- ---------------- -----------------

NorAm Energy Services, Inc. 1402 FT 55,000 * See Formula below NNG @ Red Moon CGT @ Perryville

KN Energy ANR @ Perryville

Delhi @ Custer TET @ West Monroe

Enogex @ Lookeba Koch @ West Monroe

El Paso @ Line 2 South Trunkline @ Richland

Tennessee 100

Tennessee 800

TGT @ Perryville

Sonat @ Perryville

IMC Sterlington Plant

Formula Rate for Services up to Contract Demand:

The formula rate shall be based on the index prices ("Index Prices") for spot Gas delivered to the pipelines at the areas indicated, as published in the first issue of

the Month of Inside FERC's Gas Market Report for the Service Month. If the information or publication ceases to be published, the parties shall select another mutually

agreeable Index Price. The Index Spread shall be the difference between the Index Prices specified in (1) and (2) below.

(1) The average of ANR Pipeline Company (OK) and Panhandle Eastern Pipeline Company (TOK);

(2) Columbia Gulf Transmission Company (LA) plus $0.03.

If the Index Spread is less than $0.10, then the unit rate per Dth of Contract Demand shall be $0.10. If the Index Spread is greater than Transporter's then-

effective maximum Tariff rate, as shown on its Statement of Effective Rates and Charges for Transportation of Gas, on a unit basis, including all applicable surcharges

("Maximum Rate"), then the unit rate per Dth of Contract Demand shall be (a) the difference between the Index Spread and the Maximum Rate, multiplied by (b) sixty

percent (60%), plus (c) the Maximum Rate. Otherwise, the unit rate per Dth of Contract Demand shall be equal to the Index Spread. In any event, however, the unit

rate per Dth of Contract Demand in any Month shall never be below Transporter's then-effective minimum Tariff rate.

* Only 29,000 Dth/d is subject to the negotiated rate formula.