EXHIBIT "C" ATTACHED TO AND FORMING PART OF A SETTLEMENT AGREEMENT 
MADE EFFECTIVE AS OF NOVEMBER 1, 1994 BETWEEN SAN DIEGO GAS & 
ELECTRIC COMPANY AND HUSKY OIL OPERATIONS LTD.

                           AMENDING AGREEMENT

    THIS AMENDING AGREEMENT made effective as of November 1, 1994.


BETWEEN:

    SAN DIEGO GAS & ELECTRIC COMPANY, a California 
    corporation with its principal place of business in San
    Diego, California ("SDG&E")

                             OF THE FIRST PART
             - and -


    HUSKY OIL OPERATIONS LTD., an Alberta corporation, with 
    its principal place of business in Calgary, Alberta ("Seller")

                             OF THE SECOND PART

          WHEREAS SDG&E and Seller are parties to a Natural Gas 
Purchase Agreement made as of March 12, 1991 (the "Gas Purchase 
Agreement"); and

          WHEREAS the parties wish to amend the Gas Purchase 
Agreement in the manner hereinafter set forth.

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

1.       The terms and expressions which are defined in the Gas 
Purchase Agreement shall have the same meanings where used in this 
Amending Agreement except where the context otherwise requires.

2.       Subsection 1.1 is amended as follows:

    (a)  Subsection 1.1(z) is deleted and replaced with the 
          following:  

        "(z)  "NOVA" means NOVA Gas Transmission Ltd."

    (b)  Subsection 1.1(ii) is deleted and replaced with the
          following:  

        "(ii)  "SDG&E's Transporters" means those transporters 
        operating pipeline facilities which are used to transport 
        gas from the Delivery Point to the interconnection of the 
        facilities of PG&E with SoCal's 

                               - 1 -



<PAGE>

         System; being the 1993 expansion facilities of ANG, PGT
         and PG&E;"

    (c)  The following subsection 1.1(mm.1) is added after
         subsection 1.1(mm):

         "(mm.1)  "SoCal's System" means the facilities owned and 
         operated by SoCal for the transmission of natural gas and 
         for the purposes of Article VI shall be deemed to 
         interconnect with the facilities of PG&E at Kern River 
         Station, California and deemed to interconnect with the 
         facilities of El Paso and Transwestern at the 
         California border near Blythe, California and Needles, 
         California;"

    (d)  Subsection 1.1(qq) is deleted.

3.       Section 6.1 is amended as follows:

    (a)  The definition of Contract Price is deleted and replaced 
         with the following:  

         "Contract Price = Reference Price - SDG&E's Unit 
         Transportation Cost"

    (b)  The definition of Reference Price is amended by deleting 
         "as set forth in Schedule "A" and indexed in the manner 
         set forth in Schedule "A"" and inserting "as calculated 
         pursuant to Appendix "A"."

    (c)  Schedule "A" to the Gas Purchase Agreement is deleted and 
         replaced with Appendix "A" attached hereto.  Appendix A" 
         is incorporated into and is a part of the Gas Purchase 
         Agreement by this reference as though contained in the 
         body of such Agreement.

    (d)  The definition of SoCal Unit Transportation Cost is 
         deleted.

    (e)  The definition of SDG&E's Unit Transportation Cost is 
         deleted and replaced with the following:

         "SDG&E's Unit Transportation Cost = in respect of any 
         Month, SDG&E's unit cost (in $U.S./MMBtu), being the sum 
         of all SDG&E's Transporters' fixed and variable charges 
         or surcharges,  net of any credits, that apply to the 
         firm transportation of gas  hereunder in such Month from 
         the Delivery Point to SoCal's System, including any non-
         tariff costs such as shipper provided fuel and line 
         loss.  This unit cost will be the 100% load factor rate 
         calculated based on an assumed full utilization of 
         transportation capacity held on SDG&E's Transporters 
         equal to the MDQ 

                               - 2 -



<PAGE>

         regardless of whether Seller delivered and SDG&E 
         received less than the MDQ."

    (f)  The last paragraph of Section 6.1 is amended by deleting 
         "the SoCal Unit Transportation Cost or".

4.       Section 6.3 is deleted and replaced with the following:  

         "6.3  Rolled-in Rates.

              If FERC authorizes rolled-in rates on the PGT 
         pipeline, the resulting transportation charges, 
         including any surcharges associated with the 
         restructuring of PG&E's Alberta and Southern Gas Co. 
         Ltd. obligation:

         (a)  shall be the responsibility of Seller if and to the 
              extent it assumes SDG&E's present capacity rights 
              on the PGT pipeline; or

         (b)  shall continue to be otherwise included within the 
              definition of "SDG&E's Unit Transportation Cost"."

5.       Section 7.1 is amended by:

    (a)  deleting "SoCal Unit Transportation Cost," and

    (b)  by replacing "WACOG" with "Base Price".

6.       SDG&E and Seller each restate as being true and correct 
         as of the date of this Amending Agreement each of the 
         representations and warranties made by them and set 
         forth in Article XII of the Gas Purchase Agreement.

7.       Section 15.1 is amended by:

    (a)  in the fifth line by replacing "been unable" with 
         "failed or will fail"; 

    (b)  in the fourteenth line adding after "SDG&E's System" the 
         words ", SoCal's System"; and

    (c)  in the last line by replacing "is unable" with "has 
         failed or will fail".

8.       Section 15.2(c)(iv) is amended by replacing in the 
         seventh line "is unable" with 
         "has failed or will fail".

                               - 3 -



<PAGE>

9.       Section 17.1 is amended by replacing "assigns" with 
         "permitted assigns".

10.      Subsections 17.2(b), (c) and (d) are deleted and replaced 
by the following new subsections 17.2(b), (c), and (d), and an 
additional subsection 17.2(e) is added::

         (b)  SDG&E shall not require Seller's consent under 
         subsection (a) to assign all of its rights, obligations 
         and interests in this Agreement to an affiliate of SDG&E 
         that provides gas service to markets that includes core 
         customers in San Diego County (the "Affiliate").  In 
         such circumstances the Affiliate shall be bound by all 
         of the terms and conditions of this Agreement and, 
         notwithstanding such assignment, SDG&E shall continue to 
         remain liable for all of the obligations of the 
         Affiliate, whether such obligations arose prior to the 
         effective date of the assignment, or arise from or after 
         the effective date of the assignment unless and until 
         the Affiliate can demonstrate to Seller's reasonable 
         satisfaction the Affiliate's ability to meet all 
         existing and continuing obligations under this 
         Agreement.

         For the purposes of this subsection 17.2(b), the term 
        "Affiliate" shall mean, with respect to any person, any 
         other person (other than an individual) that, directly 
         or indirectly, through one or more intermediaries, 
         controls, or is controlled by, or is under common 
         control with, such person.  For the purposes of the
         foregoing definition, "control" means the direct or 
         indirect ownership of more than 50% of the outstanding 
         capital stock or other equity interests having ordinary 
         voting power.

         (c)  In the event that SDG&E reasonably believes that 
         Seller's ability to meet its material obligations under 
         this Agreement is materially impaired, SDG&E may, by 
         written notice to Seller, require Seller to provide 
         further assurances within ninety (90) days, which in 
         SDG&E's reasonable judgment are adequate to provide 
         comfort that Seller can continue to perform its 
         material obligations hereunder.  If Seller is unable to 
         provide such assurances, SDG&E may upon thirty (30) 
         days written notice terminate this Agreement.  

         (d)  In the event that Seller reasonably believes that 
         SDG&E's ability to meet its material obligations under 
         this Agreement is materially impaired, Seller may, by 
         written notice to SDG&E, require SDG&E to provide 
         further assurances within ninety (90) days, which in 
         Seller's reasonable judgment are adequate to provide 
         comfort that SDG&E can continue to perform its material 
         obligations hereunder.  If SDG&E is unable to provide 
         such assurances, Seller may upon thirty (30) days 
         written notice terminate this Agreement.  This 
         subsection (d) shall not apply to the assignment 
         described in subsection 17.2(b).

         (e)  For purposes of subsections 17(2)(c) and 17(2)(d), 
         Seller shall mean both Seller and its permitted assigns 
         and SDG&E shall mean both SDG&E and its permitted 
         assigns."

                              - 4 -



<PAGE>

11.       The Seller's address for notices in Section 19.1 is 
deleted and replaced with the following:

         "To Seller:     Husky Oil Operations Ltd.
                         707 - 8th Avenue S.W.
                         P.O. Box 6525, Station "D"
                         Calgary, Alberta  T2P 2G7

                         Attention:  Manager, Natural Gas Supply 
                                     and Marketing
                         Telecopy:  (403) 298-6093"

12.       Section 22.2 is amended by replacing "assigns" with 
"permitted assigns".

13.       The following sections are added to Article XXII: 

          "22.7  Time of Essence.  Time shall be of the essence of 
          this Agreement.

          22.8  Severability.  If one or more provisions 
          contained in this Agreement are invalid, illegal or 
          unenforceable in any respect under any applicable law 
          the validity, legality and enforceability of the 
          remaining provisions of this Agreement shall not be 
          affected or impaired thereby.

          22.9  Preparation.  This Agreement was prepared with 
          each of the parties having access to its own counsel 
          and the parties waive any claim they may have now or in 
          the future based on this Agreement not having been 
          prepared jointly by the parties or by either to the 
          exclusion of the other.

14.       This Amending Agreement was prepared with each of the 
parties having access to its own counsel and the parties waive any 
claim they may have now or in the future based on this Amending 
Agreement not having been prepared jointly by the parties or by 
either to the exclusion of the other.

15.       This Amending Agreement may be executed in any number of 
counterparts, each of which when so executed shall be deemed to be 
an originally executed copy, and it shall not be necessary in 
making proof of the Amending Agreement to produce all of such 
counterparts.

16.       Each party represents and warrants that the officer or 
officers signing this Amending Agreement on its behalf is 
authorized to do so.

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<PAGE>

17.       This Amending Agreement shall be governed by and 
construed according to the laws of the Province of Alberta.

          IN WITNESS WHEREOF this Agreement is executed in 
multiple originals effective as of the date and year first above 
written.




SAN DIEGO GAS & ELECTRIC COMPANY     HUSKY OIL OPERATIONS LTD.


By:  ___________________________ By:  ____________________________

Name:  _________________________ Name: ___________________________

Title: _________________________ Title:___________________________


                                 By:  ____________________________

                                 Name: ___________________________

                                 Title:___________________________

                               - 6 -



<PAGE>

APPENDIX "A" ATTACHED TO AND FORMING PART OF A GAS PURCHASE 
AGREEMENT BETWEEN SAN DIEGO GAS & ELECTRIC COMPANY AND HUSKY OIL 
OPERATIONS LTD. DATED MARCH 12, 1991 AS AMENDED BY AMENDING 
AGREEMENT MADE EFFECTIVE AS OF NOVEMBER 1, 1994.

1.0     "Reference Price" for the Month = Base Price for the Month 
        x 0.97

2.0     "Base Price" for the Month = Southwest Basin Index for the 
        Month plus Southwest Transportation Cost for the Month.

3.0     The Reference Price and Base Price shall be rounded to 
        four decimal places.

4.0     The terms and expressions which are defined in the Gas 
        Purchase Agreement shall have the same meanings when used 
        in this Appendix unless the context otherwise requires.

                   CALCULATION OF SOUTHWEST BASIN INDEX

5.0      "Southwest Basin Index" for the Month (expressed in 
         $/MMBTU) = (0.70 x San Juan Index Price) plus (0.30 x 
         Permian Index Price) as described in sections 6.0 and 
         6.1.

6.0      "San Juan Index Price" for the Month:

         (a)  shall equal the index price of gas supply for 
              deliveries from the San Juan basin into the El Paso 
              system as published in the first issue of the 
              current month by Inside FERC's Gas Market Report, in 
              the table Prices of Spot Gas Delivered to Pipelines,
              El Paso Natural Gas Co. San Juan Basin (expressed in 
              $/MMBTU);or

         (b)  if the index described in section 6.0(a) is not 
              published in the first issue of the current month, 
              shall equal the first posted Contract Index as 
              published by Natural Gas Intelligence, for 
              deliveries from the San Juan basin into the El Paso 
              system for the current month in the table 
              Spot Gas delivered to Pipelines 30 Day Supply 
              Transactions, Rocky Mountains, El Paso San 
              Juan (expressed in $/MMBTU).

6.1       "Permian Index Price" for the Month:

         (a)  shall equal the index price of gas supply for 
              deliveries from the Permian basin into the 
              Transwestern system as published in the first issue 
              of the current month by Inside FERC's Gas Market 
              Report, in the table "Prices of Spot Gas Delivered 
              to Pipelines", Transwestern Pipeline Co. Permian 
              Basin (expressed in $/MMBTU); or

         (b)  If the index described in section 6.1(a) is not 
              published in the first issue of the current month, 
              shall equal the first posted Contract Index as 
              published by Natural Gas Intelligence, for
              deliveries from the Permian basin into the
              Transwestern system for the current month in the 
              table Spot Gas Prices Delivered to Pipelines, 30 Day 
              Supply Transactions, West Texas/Permian Basin 
              Transwestern (expressed in $/MMBTU).


              CALCULATION OF SOUTHWEST TRANSPORTATION COST

7.0       "Southwest Transportation Cost" for the Month (expressed 
          in $/MMBTU) = Transportation Fuel Cost plus
          Transportation Variable Cost plus Transportation Fixed 
          Cost.

                              1 of 6



<PAGE>

           TRANSPORTATION FUEL COST

8.0       "Transportation Fuel Cost" for the Month (expressed in 
          $/MMBTU) = (0.70 x El Paso Fuel Cost) plus (0.30 x 
          Transwestern Fuel Cost) as described in sections 8.1 and 
          8.2.

8.1       "El Paso Fuel Cost" for the Month, (expressed in 
          $/MMBTU) = [San Juan Index Price divided by (1 - EP % of 
          Fuel Use)] minus San Juan Index Price

          where "EP % of Fuel Use" means the applicable figure 
          published in the Firm Transportation Tariff, T-3, for 
          the El Paso system, or any equivalent replacement or 
          successor rate or rate schedule. Currently the EP % of 
          Fuel Use is documented on Original Sheet No. 116 of Rate 
          Schedule T-3 issued on May 23, 1994, paragraph 7a.

8.2       "Transwestern Fuel Cost" for the Month (expressed in 
          $/MMBTU) = [Permian Index Price divided by (1 - TW % of 
          Fuel Use)] minus Permian Index Price

          where "TW % of Fuel Use" means the applicable figure 
          published in the Firm Transportation Tariff, FTS-1, for 
          the Transwestern system, or any equivalent replacement 
          or successor rate or rate schedule.  Currently the TW % 
          of Fuel Use is documented on 109th Revised Sheet No. 5 
          issued on August 31, 1994 in the column titled Maximum 
          Fuel % for the East of Thoreau Receipt Point Area.

          TRANSPORTATION VARIABLE COST

9.0       "Transportation Variable Cost" for the Month (expressed 
          in $/MMBTU) = (0.70 x El Paso Variable Cost) plus (0.30 
          x Transwestern Variable Cost) as described in sections 
          9.1 and 9.2, but excluding Transportation Fuel Cost.

9.1       "El Paso Variable Cost" means all the transportation 
          variable cost components of the Firm Transportation 
          Tariff, T-3, including any present or future commodity 
          or usage surcharges or any equivalent replacement or
          successor rate or rate schedule, from the San Juan basin 
          to the interconnection with SoCal's System (expressed in 
          $/MMBTU).  Currently El Paso variable costs are 
          documented on second revised sheet No. 23 issued on 
          November 30, 1994 in the column titled Maximum Rate. The 
          components are Mainline transportation from San Juan to 
          California on line 1F, GRI surcharge on line 6, ACA 
          surcharge on line 7 and Take-or Pay Surcharge on line 8.

9.2       "Transwestern Variable Cost" means all the ransportation
          variable cost components of the Firm Transportation 
          Tariff, FTS-1, including any present or future commodity 
          surcharges for the Transwestern system, or any 
          equivalent replacement or successor rate or rate 
          schedule, from the Permian basin to the interconnection 
          with SoCal's System (expressed in $/MMBTU).  Currently 
          Transwestern variable costs are documented on 109th 
          Revised Sheet No. 5 under the heading FTS-1 Commodity 
          for the East of Thoreau Receipt point area.

          TRANSPORTATION FIXED COST 

10.0      "Transportation Fixed Cost" for the Month (expressed in 
          $/MMBTU) shall equal the greater of the Floor Cost as 
          described in section 10.1 or Average Transportation 
          Fixed Cost as described in section 10.2.

10.1      (a)  The "Floor Cost" for the Month (expressed in 
               $/MMBTU) shall equal the lesser of:

               (i)  $0.15; or 

              (ii)  the Full As-Billed SW Firm Service Cost as 
                    described in section 10.1(b).

                               2 of 6



<PAGE>

          (b)  The "Full As-Billed SW Firm Service Cost" for the 
               Month (expressed in $/MMBTU) shall equal the sum
               of, all for the Month:

              (0.70 x El Paso Reservation Charge) plus (0.30 x 
              Transwestern Reservation Charge).

          (c)  "El Paso Reservation Charge" shall be as determined 
               in section 10.3.

          (d)  "Transwestern Reservation Charge" for the Month 
               (expressed in $/MMBTU) means the reservation charge 
               cost component of the Firm Transportation Tariff, 
               FTS-1, including any present or future reservation 
               surcharges for the Transwestern system, or any 
               equivalent replacement or successor rate or rate 
               schedule, from the Permian basin to the
               interconnection with SoCal's System. This charge is
               currently documented on 109th Revised Sheet No. 5 
               in the column headed MAXIMUM FTS-1 RESERVATION 
               CHARGE for the East of Thoreau Receipt Point Area 
               at the line labeled TOTAL RATE.

10.2      "Average Transportation Fixed Cost" for the Month 
          (expressed in $/MMBTU) shall equal the quotient obtained 
           by dividing the sum of the following products:

          (a)  El Paso Reservation Charge multiplied by El Paso 
               Volume (both for the Month) as described in 
               sections 10.3 and 10.4;

          (b)  New SW Contracted Fixed Rate multiplied by New SW 
               Contracted Volume (both for the Month) as described 
               in sections 10.5 and 10.6;  and

          (c)  Other SW Deemed Fixed Rate multiplied by Other SW 
               Volume (both for the Month) as described in 
               sections 10.7 and 10.8;

           by Total SW Volume (for the Month) as described in 
           section 10.9.

10.3      "El Paso Reservation Charge" for the Month (expressed in 
          $/MMBTU) shall for the term of the Gas Purchase 
          Agreement equal the reservation charge published in the 
          Firm Transportation Tariff, T-3, including any present 
          or future reservation surcharges for the El Paso system 
          or any equivalent replacement or successor rate or rate 
          schedule, from the San Juan basin to the interconnection 
          with SoCal's System.  The reservation charge currently 
          includes the sum of Transportation Reservation Charge 
          documented on First Revised Sheet No. 22, line 1G - 
          California in the column titled Maximum Rate, plus the
          GRI Surcharge - High Load Factor documented on line 3A 
          of the same page, plus the Washington Ranch Surcharge, 
          as documented on Second Revised Sheet No. 29, in the 
          line labeled California Reservation Surcharge, all 
          divided by the number of days in the current month.

10.4      "El Paso Volume" for the Month (expressed in MMBTU's) 
          shall equal the product of 10,300 MMBTU per day 
          multiplied by the number of days in that Month.

10.5      (a)  The "New SW Contracted Fixed Rate" for the Month 
               (expressed in $/MMBTU) shall equal the quotient 
               obtained by dividing the sum of:

               (i)  The reservation charge, including any present 
                    or future reservation surcharges, (expressed 
                    in $/MMBTU) as stated in each acquired 
                    capacity agreement or transportation contract 
                    of one year or longer for firm transportation 
                    service held by SDG&E to deliver gas from the 
                    San Juan or Permian basin on the El Paso or 
                    Transwestern systems to SoCal's System 
                    multiplied by the volume of gas actually 
                    transported under each such contract,

                by New SW Contracted Volume as described in 
                section 10.6.

                The charges and volumes referenced in section 
                10.2(a) and all charges and volumes referenced in  
                section 10. 5(b) shall be excluded from this 
                calculation.

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<PAGE>

          (b)  "Excluded Contracts" means:

               (i)  Any firm service transportation capacity 
                    acquired by or for the account of SDG&E as the 
                    result of the Southern California Edison ITCS 
                    Proposal (OIR R.88-08-018, joint petition 
                    No.92-07-025) or similar proposals as approved 
                    or directed by the CPUC relating to the 
                    assignment or release to SDG&E of El Paso or 
                    Transwestern firm transportation service held 
                    by SoCal;  and

              (ii)  SDG&E's 90 Mmcf/d firm service transportation 
                    contract with SoCal which is comprised of 
                    transportation contracts Nos. EP98L8, EP98L2 
                    and TW22513;

          (c)  If SDG&E secures any acquired capacity agreement or 
               transportation contract as described in section 
               10.5(a) that has (1) variable costs higher than (2) 
               the applicable tariff variable costs in sections 
               9.1 or 9.2, then the positive difference of (1) 
               minus (2) will be added to and deemed part of the 
               reservation charge of that contract in section 
               10.5(a).  The resulting reservation charge cannot 
               exceed the Full As-Billed SW Firm Service Cost as 
               defined in section 10.1(b.)

10.6      "New SW Contracted Volume" for the Month (expressed in 
          MMBTU's) shall equal the aggregate of the volumes of gas 
          actually transported by SDG&E in the Month under the 
          firm transportation service contracts described in 
          section 10.5(a) and excluding only the El Paso Volume 
          referred to in section 10.4 and Excluded Contracts' 
          volumes as described in section 10.5(b).

10.7      "Other SW Deemed Fixed Rate" for the Month (expressed in 
          $/MMBTU) shall equal the California Index minus 
          (Transportation Fuel Cost plus Transportation Variable 
          Cost plus Southwest Basin Index).

          The "California Index" for the Month (expressed in 
          $/MMBTU) shall equal the current month Index under the 
          line titled Southern CA Border on the table titled U.S.
          SPOT MARKET SUMMARY in the publication titled BTU's 
          Daily Gas Wire in the first issue of the current 
          month or if that index is not published for the current
          month then the replacement index will be:  The 
          California Border Contract Index Price on the table 
          titled Spot Gas Prices Delivered to Pipelines 30 Day 
          Supply Transactions from the publication Natural Gas 
          Intelligence.

10.8      "Other SW Volume" for the Month (expressed in MMBTU's) 
          shall equal the positive difference, if any, obtained by 
          subtracting from Total SW Volume, as described in 
          section 10.9, the sum of El Paso Volume plus New SW 
          Contracted Volume.

10.9      "Total SW Volume" means the total quantity of gas 
          (expressed in MMBTU's) received by SDG&E in the Month:

          (a)  at the interconnection of the El Paso system and 
               SoCal's System;

          (b)  at the interconnection of the Transwestern system 
               and SoCal's System.

10.10     If requested by Seller, SDG&E shall provide Seller with 
          current copies of all firm acquired capacity agreements 
          and transportation contracts, as amended from time to 
          time, as described in section 10.5 and as applicable to 
          the pricing terms of this Agreement.

          ARBITRATION

11.0      (a)  Subject to any other provisions of this Appendix:

              (i)  if any published index or price, or any rate or 
                   tariff or other provision of the Gas Purchase 
                   Agreement, including this Appendix, which is 
                   required to determine the Base Price:

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<PAGE>

                   (A)  ceases to be available or ascertainable;
                        or 

                   (B)  assumes a measure or value that is wholly 
                        inconsistent with the measure or value 
                        represented by the component in December, 
                        1994;  or

             (ii)  if in the reasonable opinion of either party 
                   the Base Price no longer represents a price 
                   which is competitive with SDG&E's alternative 
                   southwest gas supplies 

             (any of the circumstances described in (i) or (ii) 
             shall, subject to section 11.0(b), be referred to as 
             a "Pricing Event"), 

     then either party may by notice in writing, within ninety 
     (90) days of the Pricing Event, require the other party to 
     meet and attempt in good faith to negotiate a replacement 
     index, price, rate, tariff or mechanism in order that the 
     Base Price will be: 

            (iii)  competitive with the cost of SDG&E's 
                   alternative southwest gas supplies; and

            (iv)   insofar as possible, consistent with the 
                   pricing structure as set out in this Appendix; 

            ((iii) and (iv) herein shall be referred to as the 
            "Standard").

     (b)  Notwithstanding the provisions of subsection 11.0(a), in 
          no event shall:

              (i)  the concept of the Floor Cost as described in 
                   section 10.1(a) (which may be zero or any other 
                   amount up to and including $0.15);

             (ii)  the amount set forth in section 10.1(a)(i); or

            (iii)  the 70%/30% allocations contained in the 
                   calculation of the Base Price, so long as gas 
                   continues to be supplied to California from 
                   both the San Juan and Permian basins on the 
                   El Paso and Transwestern systems respectively;

                   be cause for a Pricing Event or subject to 
                   redetermination as part of any arbitration.

     (c)  If the parties are unable to negotiate a replacement 
          index, price, rate, tariff or mechanism within three (3) 
          months following the provision of the notice referred to 
          in section 11.0(a), the parties shall proceed to 
          arbitration pursuant to the following provisions of this 
          section.

     (d)  The matter shall be referred to and finally resolved by 
          arbitration under the rules of the British Columbia 
          International Commercial Arbitration Centre.  The 
          appointing authority shall be the British Columbia 
          International Commercial Arbitration Centre.  The case 
          shall be administered by the British Columbia 
          International Commercial Arbitration Centre in 
          accordance with its "procedures for cases under the 
          BCICAC Rules".  The place for arbitration shall be 
          Vancouver, British Columbia, Canada.

     (e)  Any such arbitration shall be limited to determining a 
          replacement index, price, rate, tariff or mechanism 
          which will result in a Base Price formula which will 
          meet the Standard.  If the arbitrator determines that no 
          appropriate replacement index, price, rate, tariff or 
          mechanism exists then the arbitrator shall determine a 
          Base Price to apply to the Gas Purchase Agreement which 
          will meet the Standard.

     (f)  Upon a replacement index, price, rate, tariff, mechanism 
          or Base Price being determined by negotiation or 
          arbitration, the Base Price and Contract Price shall be 
          adjusted to reflect the difference, if any, for the 
          applicable month or months following the month of the 
          Pricing Event and any payment adjustment will be 
          recovered in the first payment period immediately 
          following 

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          that determination and shall include interest accrued as 
          if the adjustment was a Disputed Amount under Article 7 
          of the Gas Purchase Agreement.

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