<PAGE>
                                                                   EXHIBIT 10.17


                        TRANSPORTATION SERVICE AGREEMENT
                         UNDER RATE SCHEDULE FTS OR ITS

         THIS AGREEMENT ("Agreement"), entered into on May 20, 1992, is between
Arkansas Western Pipeline Company ("Transporter"), an Arkansas corporation, and
Associated Natural Gas Company, a division of Arkansas Western Gas Company,
("Shipper");

                                  WITNESSETH:

         WHEREAS, Shipper has requested natural gas for that Transporter
transport Shipper; and

         WHEREAS, Transporter has agreed to provide such transportation for
Shipper subject to the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

         1.1      "Maximum Daily Delivery Obligation (MDDO)" means the maximum
                  daily quantity of natural gas, expressed in Dekatherms (Dth),
                  that Transporter is obligated to deliver from time to time at
                  the Point(s) of Delivery specified in Exhibit B to the
                  executed Agreement.

         1.2      "Maximum Daily Quantity (MDQ) " means the maximum daily
                  quantity of natural gas, expressed* in Dth's, that Transporter
                  is obligated under the executed Agreement to transport on
                  behalf of' Shipper, which shall be 23,000 Dth.

         1.3      "Equivalent Quantity" means the quantity, expressed in Dth's,
                  delivered to Shipper by Transporter at the Point(s) of
                  Delivery. Such quantity is equal to the quantity of gas
                  received from Shipper at the Point(s) of Receipt less Fuel
                  Usage and Applicable Shrinkage.

         1.4      "Fuel Usage and Applicable Shrinkage" means the quantity of
                  natural gas retained by Transporter for fuel usage, leakage,
                  blow-down, minor line pack fluctuations, and lost and
                  unaccounted for natural gas.


<PAGE>
                                   ARTICLE II

                       NATURAL GAS TRANSPORTATION SERVICE

         2.1      Beginning on the date on which deliveries of natural gas are
                  commenced hereunder, and thereafter for the remaining term of
                  this Agreement, Shipper agrees to tender gas to Transporter at
                  the Point(s) of Receipt, and Transporter agrees to transport
                  and redeliver and Shipper agrees to accept delivery of the
                  Equivalent Quantities of gas at the Point(s) of Delivery, all
                  in accordance with the terms of this Agreement.

         2.2      Transportation service rendered hereunder shall be
                  firm/interruptible service as described in Section 2 of
                  Transporter's X Rate Schedule FTS _____ Rate Schedule ITS.

                                  ARTICLE III

                              POINT(S) OF RECEIPT

         The Point(s) of Receipt at which Transporter shall receive gas for
         transportation under this Agreement shall be specified in Exhibit A to
         this Agreement.

                                   ARTICLE IV

                              POINT(S) OF DELIVERY

         The Point(s) of Delivery at which Transporter shall redeliver to
         Shipper or for the account of Shipper an Equivalent Quantity of gas for
         transportation under this Agreement shall be specified in Exhibit B to
         this Agreement. Notwithstanding the MDDO at each Point of Delivery,
         Shipper shall not nominate a total quantity of natural gas at all
         Points of Delivery that exceeds the MDQ set forth in this Agreement.

                                   ARTICLE V

                               TERM OF AGREEMENT

         5.1      Subject to the General Terms and Conditions of Transporter's
                  FERC Gas Tariff and Rate Schedule FTS/ITS, this Agreement
                  shall be effective as of the date of physical completion of
                  and initial deliveries on Transporter's pipeline and shall
                  continue for a primary term of ten years. Thereafter, this
                  Agreement shall be effective month to month, until terminated
                  by Transporter or Shipper upon the following written notice to
                  the other specifying a termination date: sixty (60) days for


<PAGE>
                  interruptible transportation under Rate Schedule ITS and 180
                  days for firm transportation under Rate Schedule FTS.

         5.2      Any portions of this Agreement necessary to balance receipts
                  and deliveries under this Agreement as required by the FTS/ITS
                  Rate Schedule, shall survive the other parts of this Agreement
                  until such time as such balancing has been accomplished.

                                   ARTICLE VI

                           RATE SCHEDULE AND CHARGES

         6.1      Shipper shall pay Transporter for the service hereunder an
                  amount determined in accordance with Transporter's FTS/ITS
                  Rate Schedule, and the General Terms and Conditions of
                  Transporter's FERC Gas Tariff, all as may be revised from time
                  to time. Such FTS/ITS Rate Schedule and General Terms and
                  Conditions are incorporated by reference and made a part
                  hereof.

         6.2      Transporter may seek authorization from the FERC and/or other
                  appropriate body to change any rate(s) and/or term(s) set
                  forth herein or in the FTS or ITS Rate Schedule. Nothing
                  herein shall be construed to deny Shipper any rights it may
                  have under the Natural Gas Act or the Natural Gas Policy Act
                  including the right to participate fully in rate proceedings
                  by intervention or otherwise to contest increased rates in
                  whole or in part.

                                  ARTICLE VII

                             REDUCTION IN CAPACITY

         For firm transportation only, if Transporter's capacity is reduced for
         any reason and a reduction of the quantity of gas being transported
         hereunder is required, Shipper's MDQ shall be reduced pro rata with the
         MDQ's of the other firm Shippers during the period of such capacity
         reduction.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         8.1      Amendment. This Agreement shall only be amended, varied or
                  modified by an instrument in writing executed by Transporter
                  and Shipper. Such amendment will be effective upon compliance
                  with Article VIII herein.


<PAGE>

         8.2      Applicable Law. This Agreement and the rights and duties of
                  Transporter and Shipper hereunder shall be governed by and
                  interpreted in accordance with the laws of the State of
                  Arkansas, without recourse to the law governing conflict of
                  laws.

         8.3      Waiver. No waiver by either Transporter or Shipper of any
                  default by the other in the performance of any provision,
                  condition or requirement herein shall be deemed a waiver of,
                  or in any manner a release from, performance of any other
                  provision, condition or requirement herein, nor deemed to be a
                  waiver of, or in any manner a release from, future performance
                  of the same provision, condition or requirement; nor shall any
                  delay or omission by Transporter or Shipper to exercise any
                  right hereunder impair the exercise of any such right or any
                  like right accruing to it thereafter.

         8.4      Headings. The headings of each of the various sections in this
                  Agreement are included for convenience of reference only and
                  shall have no effect on, nor be deemed part of the text of,
                  this Agreement.

         8.5      Further Assurances. Transporter and Shipper shall execute and
                  deliver all instruments and documents and shall do all acts
                  necessary to effectuate this Agreement.

         8.6      Entire Agreement. This Agreement constitutes the entire
                  agreement between Transporter and Shipper concerning the
                  subject matter hereof and supersedes all prior understandings
                  and written and oral agreements relative to said matter.

         8.7      Cancellation of Prior Agreement(s). This Agreement, upon its
                  effective date, supersedes and cancels any and all other
                  agreements between Transporter and Shipper relating to the
                  transportation of gas by Transporter for Shipper.

                                   ARTICLE IX

                                    NOTICES

         All notices, requests, statements or other communications provided for
         under this Agreement shall be in writing and shall be given by personal
         delivery or by United States mail, postage prepaid, and addressed as
         follows:

         If to Shipper:

         Arkansas Western Gas Company
         1001 Sain Street
         P. 0. Box 1288
         Fayetteville, AR 72702-1288


<PAGE>
         If to Transporter:

         Arkansas Western Pipeline Company
         1083 Sain Street
         P. O. Box 1408
         Fayetteville, AR 72702-1408
         Attn: Manager of Transportation Services

         All written notices, requests, statements or other communications shall
         be sufficiently given if mailed postage prepaid by registered,
         certified, or regular mail and shall be deemed to have been duly
         delivered on the third business day following the date on which same
         was deposited in the United States mail, addressed in accordance with
         this Article VIII. Either Shipper or Transporter may designate a
         different address to which notices, requests, statements, payments or
         other communications shall be sent upon proper notice as set forth in
         this Article VIII.

              IN WITNESS WHEREOF, Transporter and Shipper have caused this
Agreement to be duly executed by their duly authorized officers in two (2)
original counterparts as of May 20, 1992.

                                      "TRANSPORTER"

                                      ARKANSAS WESTERN PIPELINE COMPANY
                                      an Arkansas Corporation


                                      By /s/ [ILLEGIBLE]
                                         ---------------------------------------
                                         President


WITNESS: /s/ [ILLEGIBLE]
         ------------------------

                                      "SHIPPER"

                                      ASSOCIATED NATURAL GAS COMPANY,
                                      a division of Arkansas Western Company Gas
                                      Company


                                      By /s/ [ILLEGIBLE]
                                         ---------------------------------------


WITNESS:
         ------------------------




<PAGE>
                                    EXHIBIT A
                                       TO
                        TRANSPORTATION SERVICE AGREEMENT
                               DATED MAY 20, 1992
                     BETWEEN ASSOCIATED NATURAL GAS COMPANY
                      AND ARKANSAS WESTERN PIPELINE COMPANY


<Table>
<Caption>
                                                                              Pressure Psig
                               Meter                                   MDQ    -------------
     Receipt Point             Number     SEC-TWN-RNG   County   ST   Dth/d    Max     Min
     -------------             -------    -----------   ------   --   ------  -----   -----
<S>  <C>                       <C>        <C>           <C>      <C>  <C>     <C>     <C>
1.   NOARK Pipeline System     Pending     31-19N-9E     Clay    AR   23,000   685     550
</Table>


SHIPPER:                                TRANSPORTER:
ASSOCIATED NATURAL GAS COMPANY          ARKANSAS WESTERN PIPELINE COMPANY


By: /s/ [ILLEGIBLE]                     By: /s/ [ILLEGIBLE]
    --------------------------              -----------------------------



<PAGE>
                                    EXHIBIT B
                                       TO
                        TRANSPORTATION SERVICE AGREEMENT
                               DATED MAY 20, 1992
                     BETWEEN ASSOCIATED NATURAL GAS COMPANY
                      AND ARKANSAS WESTERN PIPELINE COMPANY


<Table>
<Caption>
                                                                               Pressure Psig
                               Meter                                   MDDO    -------------
     Delivery Point            Number     SEC-TWN-RNG   County    ST   Dth/d    Max     Min
     --------------            -------    -----------   -------   --   ------  -----   -----
<S>  <C>                       <C>        <C>           <C>       <C>  <C>     <C>     <C>
1.   Associated Natural Gas    Pending    28-19N-10E    Dunklin   mo   23,000   500     400
</Table>


SHIPPER:                                TRANSPORTER:
ASSOCIATED NATURAL GAS COMPANY          ARKANSAS WESTERN PIPELINE COMPANY


By: /s/ [ILLEGIBLE]                     By: /s/ [ILLEGIBLE]
    --------------------------              -----------------------------
    President
<PAGE>

                                   SCHEDULE 2

              CONTRACTS BIFURCATED OR PARTIALLY ASSIGNED TO ATMOS


<Table>
<Caption>
Contract                               Quantity Assigned        Expiration
--------                               -----------------        ----------
Transportation & Storage:
<S>                                    <C>                      <C>
AWP FT dated 5/20/92                    13,370 MMBtu/d          07/31/2003
Ozark FT #Z2001 @ AWP                   13,370 MMBtu/d          10/31/2002
Ozark FT #Z2001 @ NGPL                   .2000 MMBtu/d          10/31/2002
TETCO CDS (FT) #800204                   9,826 MMBtu/d          10/31/2012
TETCO SSI #400184                       11,303 DTH/d W/D        04/30/2012
                                        .3,876 DTH/d Inj.       04/30/2012
Supply:
SEECO Finn Sales dated 10/1/90          15,370 MMBtu/d          09/30/2000
</Table>

<PAGE>
              FORM OF NOTICE OF PERMANENT RELEASE OF FIRM CAPACITY
                        AND CONSENT TO PARTIAL ASSIGNMENT

A.       Associated Natural Gas Company, a division of Arkansas Western Gas
         Company ("Releasing Shipper") is a firm Shipper that is party to an
         executed and valid Service Agreement with Arkansas Western Pipeline
         Company under Rate Schedule FTS ("Transporter"). Releasing Shipper
         proposes to release capacity as set forth below, and in accordance with
         the applicable provisions of Transporter's FERC Gas Tariff. Upon the
         satisfaction of all conditions applicable to the proposed release
         transaction, including all applicable provisions of Section 14 of the
         General Terms and Conditions of Transporter's FERC Gas Tariff,
         Releasing Shipper will consent to a partial and permanent assignment of
         capacity on Transporter's system. Subject to the satisfaction of such
         conditions by the Releasing Shipper and the Replacement Shipper,
         Transporter will consent to this partial and permanent assignment of
         capacity on its system, and will waive the requirement under Section
         14.7 of the General Terms and Conditions of Transporter's FERC Gas
         Tariff, providing that Releasing Shipper shall remain the guarantor of
         payment to Transporter of all demand charges arising under its Service
         Agreement with Transporter for such assigned capacity.

B.       Rate Schedule and contract number pursuant to which capacity is
         released, Contract Number: FTS - 0 1

C.       Quantity of capacity to be released: Max 13,370 Dfli/Day,
                               Min 13,370 DthDay.

D.       (i) Minimum transportation rate acceptable to Releasing Shipper (if
         none, write "none"; includes commodity component):

         Tariff Rate

         (ii) Bid Requirements:

              (a) _X_ Reservation, __Volumetric

                  or ___ Volumetric with ___ volume commitment

              (b) __ Dollar/Cents or __ Percentage

E.       Receipt Points and Delivery Points (designate primary and/or
         secondary):

         Receipt Point: "Ozark/AWP Interconnect" Meter 00010

         Delivery Point: "AWP/ANG Interconnect" Meter 00020 MDQ @ 13,370
         MMBtu/d.


<PAGE>
F.       Bid Evaluation Methodology: i) highest rate, net revenue or present
         value

         ii).     If Releasing Shipper chooses to provide weighting factors in
                  accordance with Section 14.9 of the General Terms and
                  Conditions of Transporter's FERC Gas Tariff, weighting factors
                  are as follows: Please provide a range for each factor between
                  0 - 1,000. The numbers need not add up to 1,000.

                  _________________ Volume (0 - 1,000)

                  Max Rate ___________________ -1 Rate (0 - 1,000)


G.       i).      Designated Replacement Shipper (if none, write "none"):

                  United Cities Gas Company a, division of Atmos Energy
                  Corporation.

         ii).     Terms and conditions agreed to between Releasing Shipper and
                  Designated Replacement Shipper:

                               _________ Demand Rate (MMBtu)

                               13,370 Volume MMBtu/Day

         iii)     Releasing Shipper and Designated Replacement Shipper
                  understand Designated Replacement Shipper may not receive the
                  released capacity if it fails to match any best bid submitted
                  by another potential Shipper as provided in Transporter's FERC
                  Gas Tariff.

H.       Other terms and conditions (if none, write "none"): _________________

This is a maximum tariff rate, permanent assignment of capacity, not subject to
bid.

     "Date                         Releasing Shipper: Associated Natural Gas Co.
                                   Charles V. Stevens, Sr. Vice President

                                     ANY, a division of Atmos Energy Corporation

                                   UNITED CITIES GAS

                                   BY: /s/ [ILLEGIBLE]
                                       -----------------------------------------
                                       Replacement Shipper*

 -May 24, 2000

     Date

     Date                                         Transporter:

                       ARKANSAS WESTERN PIPELINE COMPANY

To be executed, prior to posting by Transporter, by Replacement Shipper only if
Replacement Shipper has been designated by Releasing Shipper in G(i) above.


<PAGE>
                      BID ON PERMANENTLY RELEASED CAPACITY
                      ON ARKANSAS WESTERN PIPELINE COMPANY

A.       United Cities Gas Company a, division of Atmos Energy Corporation
         ("Bidder") hereby bids on released capacity ("Capacity") on the system
         of Arkansas Western Pipeline Company ("Transporter"). This bid will
         remain open until Transporter selects a winning bidder, or notice of
         withdrawal is received by Transporter.

B.       The Capacity was released by Associated Natural Gas Company, a division
         of Arkansas Western Gas Company.

         (FTS - 01) under Transporter's Rate Schedule FTS,

C.       The transportation rate bid is Maximum Tariff Rate per Dth, not
         including commodity charge, fuel, or other applicable fees.

D.       The quantity of Capacity bid for is 13,370 Dth/Day

E.       The term of the Capacity bid for is (Permanent Assignment through
         original contract term) Months/Years, beginning June 1, 2000 and ending
         at the expiration date of contract FTS - 01.

F.       Receipt and Delivery points (designate primary and/or secondary)

         Receipt Point: "Ozark/AWP Interconnect" Meter 000 10

         Delivery Point: "AWP/ANG Interconnect" Meter 00020 MDQ @ 13,370
         MMBtu/d.

G.       Other information requested by the Releasing Shipper

         This is a maximum tariff rate, permanent assignment of capacity, not
         subject to bid.

H.       Bidder agrees to comply with all terms and conditions of Transporter's
         FERC Gas Tariff.

I.       If selected by Transporter as the winning bidder, Bidder will
         immediately execute the partial assignment form set forth below.


i        Bidder acknowledges that it has the full authority to make this bid and
         bind itself and its agents and/or principals to this bid.


                           UNITED CITIES GAS COMPANY, a division of May 24, 2000

Atmos Energy Corporation
------------------------   -----------------------------------------------------

Date                                             BIDDER

                           By: /s/ GORDON J. ROY

                               Gordon J. Roy
                               Vice President

<PAGE>
                         PARTIAL ASSIGNMENT OF CAPACITY
                      ON ARKANSAS WESTERN PIPELINE COMPANY

A.       United Cities Gas Company a, division of Atmos Energy Corporation
         ("Replacement Shipper") has submitted the winning bid for firm capacity
         on the system of Arkansas Western Pipeline Company ("Transporter") for
         capacity released by Associated Natural Gas Company, a division of
         Arkansas Western Gas Company ("Releasing Shipper"), and understands
         that its bid of (date) June 1, 2000 has been accepted by Transporter.

B.       Replacement Shipper has read and understands the terms and conditions
         under which the Releasing Shipper has permanently released such
         capacity on Transporter and hereby contracts for such capacity, in
         accordance with its bid, subject to terms and conditions set forth on
         Transporter's FERC Gas Tariff and the Service Agreement between the
         Releasing Shipper and Transporter (copy of bid and release notice
         attached). Replacement Shipper adopts such Service Agreement for the
         assigned capacity, and from and after the effective date of the
         referenced release shall be fully liable to Transporter for all demand
         charges, volumetric charges, surcharges, and other charges arising
         under the terms of the Service Agreement with Transporter for such
         assigned capacity from and after that effective date.

C.       Releasing Shipper hereby makes a partial assignment of its rights and
         obligations under contract number FTS - 01 in accordance with the
         attached bid and release notice. This assignment is made in accordance
         with Transporter's FERC Gas Tariff.

                               Releasing Shipper: Associated Natural Gas Co.
                             Charles V. Stevens, Sr. Vice President
                             UNITED GAS a division of Atmos Energy Corporation

                             BY:
                                        CITIES COMPANY

                               /s/ GORDON J. ROY
                               -------------------------------------------------
                               Replacement Shipper Gordon J. Roy, Vice President

                             Transporter:

                             Arkansas Western Pipeline Company