K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-B

Effective Date: 11/01/1994, Docket: RP94-397-000, Status: Effective

First Revised Sheet No. 32 First Revised Sheet No. 32 : Superseded

Superseding: Original Sheet No. 32

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

18. SERVICE AGREEMENT/RIGHT OF FIRST REFUSAL

Shippers with a term of one (1) year or more may exercise the Right of

First Refusal. Such agreements are not subject to pregranted

abandonment provided notice is given as described herein. A firm

Shipper may elect to retain a portion of its capacity, subject to the

Right of First Refusal process and have Transporter's pregranted

abandonment authority apply to the remainder of the capacity. The

process for exercising the Right of First Refusal is as follows:

18.1. NOTICE

Transporter will provide no more than nine (9) months, and not less

than six (6) months advance written notice of pending contract

expiration to firm Shippers with contact terms of one (1) year or

more. Shippers must give notice to Transporter no less than four

(4) months before the expiration of its firm throughput contract

that it wishes Transporter to post its capacity to begin the Right

of First Refusal process.

Failure by the Shipper to give Transporter the notice specified in

this section will result in the automatic abandonment of the

entitlement and the Shipper's right to the subject capacity at the

end of the contract term will cease.

18.2 BIDDING PROCESS

Upon Transporter's receipt of the Shipper's Right of First Refusal

notice described in Section 18.1 above, Transporter will post the

designated capacity on its Electronic Bulletin Board (EBB) in order

to solicit bids for the capacity.

A Bidder desiring to obtain the posted capacity must submit a bid

to Transporter in accordance with Section 18.3 below, within forty-

five (45) days of the posting to participate in the Right of First

Refusal process.