TF03      750020005P126Second Revised Sheet No. 75
TF04                First Revised Sheet No. 75
TF05Edward C. McMurtrie, Vice President/General Manager
TF06110503                      120903
                       GENERAL TERMS AND CONDITIONS
                                (Continued)


4.  OPERATING PROCEDURES (Continued)

    4.7   Operating Procedures for Rate Schedule LGS-1 Service: (Continued)

              (3)  Subject to Section 4.10 hereof, Shipper shall be solely
                   responsible for maintaining its inventory of LNG. Paiute
                   will not permit a Shipper's inventory balance to become
                   negative at any time. Paiute will be permitted to use
                   Shipper's inventory as Paiute determines necessary in
                   the operation of its pipeline system, but only under 
                   the following conditions: 

                   a.  Paiute has declared a Catastrophic Capacity Failure
                       or a Catastrophic Supply Failure, or deems the with-
                       drawal of LNG necessary to protect system integrity;
                       or

                   b.  Paiute has issued an Operational Flow Order (OFO) due
                       to drafting on its system and the party(s) subject
                       to said OFO has available inventory and, in Paiute's
                       sole, good faith judgment, is in non-compliance with
                       said OFO.
 
                   Paiute will control the withdrawal of LNG inventory to
                   provide adequate boil-off from the LNG Plant until the
                   commencement of the next Summer Period. These restric-
                   tions on the use by Shipper of its inventory shall not
                   prohibit the transfer of the inventory among the Ship-
                   pers, as provided in Section 4.7(c)(4) hereof.

                   If Paiute withdraws LNG pursuant to (a) above, to the
                   extent such LNG is utilized for the benefit of a Non-LNG
                   Customer, Paiute will give the appropriate LNG Customer
                   a credit against its Storage and Delivery Charges equal
                   to the amount calculated by multiplying the volumes of
                   LNG withdrawn for the Non-LNG Customer times the Annual
                   Storage and Delivery Charges which otherwise would have
                   been paid by the LNG Customer, including gas used by
                   Paiute to liquefy and gasify such replacement gas, in
                   the amounts specified in Section 5 of Rate Schedule
                   LGS-1 of this tariff. For the purposes of this section,
                   an LNG Customer which has previously exhausted its
                   inventory of LNG shall be deemed a Non-LNG Customer.