Valero Interstate Transmission Company

First Revised Volume No. 2

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Effective Date: 11/01/1991, Docket: GT91- 42-000, Status: Effective

Original Sheet No. 34 Original Sheet No. 34 : Superseded

10. The measurement hereunder shall be corrected for deviation from

Boyle's Law at the pressure and temperature under which gas is delivered

hereunder.

ARTICLE VII

PRICE AND BILLING

1. Subject to the other provisions of this Agreement and in addition to

the charges set forth in paragraph 2 below, Buyer shall pay Interstate a

price equal to the sum of the following for quantities of gas delivered

hereunder:

(a) A gathering and transportation charge at the maximum sales rate,

exclusive of Gas Cost, allowed from time to time under Rate Schedule S-3

less a 4› per MMBtu discount (credit), provided, however, the discounted

sales rate shall not be less than the minimum rate allowed under Rate

Schedule S-3.

(b) An amount equal to Interstate's average cost of purchased gas,

inclusive of production tax reimbursement, provided, however, that the

prices shall not exceed three cents (3›) above the arithmetic average of

the "Average" quotes for Regional Spot Gas Prices, Delivered to Pipeline,

30-day Supply Transactions for Southern Texas, Interstate Pipelines, as

quoted in all issues published during the applicable production month of

Natural Gas Intelligence Gas Price Index for gas deliverable in the same

month as the production month. The average cost of purchased gas shall be

computed to the nearest one hundredth of a cent and shall be computed in

accordance with the currently effective Purchased Gas Adjustment Clause

set forth on Sheet Nos. 8 thru 14 of Valero Interstate Transmission

Company's FERC Gas Tariff, First Revised Volume No. 2.

(c) A surcharge adjustment on Account 191-Current unrecovered

purchase gas costs computed in accordance with Vitco's currently effective

Purchased Gas Adjustment Clause plus the Account 191-Settlement surcharge

as computed in accordance with the provisions filed as Exhibit (F) in

Docket No. RP90-187-000.

(d) An annual charge adjustment computed in accordance with the

Annual Charge Adjustment Clause in Vitco's FERC Gas Tariff, First Revised

Volume No. 2.

2. With respect to its supply contracts which were in litigation or

arbitration on March 31, 1989 Interstate shall bill and Buyer shall pay

for take-or-pay buy out and buy down costs as follows: