K N Interstate Gas Transmission Co.

Third Revised Volume No. 1-B

Effective Date: 08/01/1996, Docket: RP96-296-000, Status: Effective

Original Sheet No. 42 Original Sheet No. 42 : Superseded

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

New or additional points may be designated as pooling

points by meeting these criteria. Points on

Transporter's transmission system where conditions may

be favorable for custody transfer of gas (i.e., rate

zone boundaries) may also be designated as "paper"

pooling points. At such paper pooling points, no

physical measurement will take place and throughput

will be assumed to equal nominations.

22.5 OWNERSHIP OF LIQUIDS/PROCESSING RIGHTS

Shippers have the right to process their own gas, or

have their gas processed by a third party, unless

otherwise provided by contract. Transporter recognizes

Shipper's ownership rights to products removed from the

gas. If gas is

processed by Transporter, absent any other agreement,

the Shipper will receive credit for extracted products

based on allocated volumes and compositions at

applicable receipt points to Transporter's transmission

system, as follows: 98% of residue gas, 50% of net

hydrocarbon liquids proceeds, and 20% of net helium

proceeds. Transporter will individually negotiate on a

non-discriminatory basis other processing arrangements

with Shippers. If Transporter has Shipper's gas

processed through a third party plant, and Shipper does

not have a processing agreement with the third party

plant, Transporter will pass through to Shipper all

residue gas and net liquids proceeds received from the

third party processor.

22.6 SCHEDULING PRINCIPLES

a. The order for scheduling transportation services

is as follows:

(1) Firm Services at primary points (scheduled

pro rata based on nominations);

(2) Firm Services at secondary points (scheduled

pro rata based on nominations);

(3) Interruptible services at maximum (scheduled

pro rata based on nominations);