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                                                                 EXHIBIT 10.19
                   
                  SECOND AMENDMENT TO CREDIT AGREEMENT among
               PACIFIC GAS TRANSMISSION COMPANY, as the Company,
                                       and
            CERTAIN COMMERCIAL LENDING INSTITUTIONS, as the Banks, and
                    THE BANK OF NOVA SCOTIA, BARCLAYS BANK PLC, and
              THE FIRST NATIONAL BANK OF CHICAGO, as Co-Agents for the Banks,
                  
                  
                                       and
                                        
                                        
              CANADIAN IMPERIAL BANK OF COMMERCE, as Agent for the Banks
                     
                     
                          Dated as of December 24, 1996
                                        
                                        
                      SECOND AMENDMENT TO CREDIT AGREEMENT
                                        
                                        
     THIS  SECOND  AMENDMENT  TO CREDIT AGREEMENT,  dated  as  of December  24,
1996 (this "Amendment"), is entered  into  by  and among  PACIFIC  GAS
TRANSMISSION  COMPANY,  a  corporation  duly organized  and validly existing
under the laws of  the  State  of California (the "Company"), the various
financial institutions as are or may become parties hereto (collectively, the
"Banks"), THE BANK  OF  NOVA  SCOTIA, BARCLAYS BANK PLC and THE FIRST  NATIONAL
BANK  OF  CHICAGO, as co-agents for the Banks (the  "Co-Agents"), and  CANADIAN
IMPERIAL BANK OF COMMERCE ("CIBC"), acting  through certain  of its U.S.
branches or agencies, as Agent (the "Agent") for the Banks.

                              W I T N E S S E T H:
                                        
     WHEREAS, the Company, the Banks, the Co-Agents and the Agent have
heretofore entered into a certain Credit Agreement, dated as of  May 31, 1995,
as previously amended (the "Credit Agreement"); and

     WHEREAS, the Company, the Banks, the Co-Agents and the Agent now  intend to
amend the Credit Agreement (i) to add a letter  of credit  subfacility and (ii)
to address various other  issues  in connection therewith,

     NOW, THEREFORE, in consideration of the premises and of  the mutual
covenants  herein contained, each  of  the  Company,  the Banks, the Co-Agents
and the Agent agree as follows:

     SECTION 1.     Amendments to Credit Agreement.
     ---------------------------------------------
     A. Section  1.1  of the Credit Agreement  is  amended  by adding  the
following definitions in the appropriate alphabetical order:

          "Agreed Currency" is defined in Section 6.1.1.
          "Approved Account Party" shall mean, at any  time, any Person  listed
          on Schedule A attached  hereto  or designated in writing by the
          Company to the Agent.
          "Cash Collateral" is defined in Section 2.10.7.
          "Cash  Equivalent Investments" shall mean, at  any time:
          
(a)  any evidence of Indebtedness, maturing not more than one year after such
time, issued  or guaranteed by the United States Government;

(b)  commercial paper, maturing not more than nine months  from  the date of
issue, which  is issued  by (i)  a  corporation  (other Than an Affiliate of the
Company) organized under the laws of  any  state of  the United States  or  of
the District of Columbia and rated A-l by Standard  & Poor's  Corporation  or 
P-l by  Moody's Investors Service,  Inc., or (ii) any Bank (or  its  holding
company);

(c)   any  certificate of deposit or  bankers acceptance, maturing not
more than one year after such time,  which  is  issued  by  either
      (i)  a commercial banking institution that is a member of the  Federal
      Reserve System and  has  a  combined capital and surplus and undivided
      profits  of  not less than $500,000,000, or (ii) any Bank; or
          
(d)   any  repurchase agreement entered  into with any  Bank  (or
other  commercial   banking institution of the stature referred to  in
clause (c)(i))  which (i) is secured by a fully perfected security
interest in any obligation of  the  type described in any of clauses
(a) through  (c);  and (ii)   has  a  market value  at  the  time
such repurchase agreement is entered into of  not  less than  100%  of
the repurchase obligation  of  such Bank  (or  other  commercial
banking  institution) thereunder.
          
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          "Dollar  Equivalent" shall mean, (i) with  respect to Dollars  or an
     amount denominated in Dollars,  such amount, and (ii) with respect to any
     monetary amount in a  currency other than Dollars, at any  time  for  the
     determination  thereof, the amount of Dollars obtained by  converting such
     foreign currency involved  in  such computation  into  Dollars at the spot
     rate  for  the purchase   of  Dollars  with  the  applicable foreign
     currency as quoted  by  the Issuer  at  approximately 11:00   a.m.  on  the
     date  of  determination thereof specified herein.
     
          "Issuance Request" shall mean an application for a Letter of Credit
     duly  executed  by an Authorized Signatory of the Company, substantially in
     the form of Exhibit L hereto or in such other form satisfactory  to the
     Issuer, in its sole discretion.
     
          "Issuer" shall mean CIBC in its capacity as issuer of the Letters of
Credit and each other Person as shall have been subsequently appointed as
the successor Issuer pursuant to Section 13.8.
     
     "Judgment Currency" is defined in Section 6.1.2.

     "Letter of Credit" is defined in Section 2.10.

     "Letter of  Credit  Cash Collateral  Account"  is defined in Section
      2.10.7.

     "Letter of Credit Commitment" shall mean the Issuer's obligation to issue
Letters of Credit for the account of the Company pursuant to Section 2.10  and,
with respect to each of the other Banks, the obligation of each such Bank to 
participate in such Letter of Credit pursuant to Section 2.10.1.
     
     "Letter  of Credit Commitment Amount" shall  mean, on  any date, a maximum
Dollar Equivalent amount  equal to  the  lesser of (i) $70,000,000 or  (ii)
the  Loan Commitment, as such amount may be reduced from time  to time
pursuant to Section 2.5.

     "Letter of Credit Outstandings" shall mean, on any date, an amount equal to
the sum  of  (a) the then aggregate Dollar Equivalent amount which is undrawn
and available under all issued and outstanding Letters of Credit, plus (b) the
then aggregate amount of all Reimbursement Obligations then outstanding with
respect to  the amount of any drawing made under any Letters of Credit.

     "Loan Commitment" shall mean, as to each Bank, the obligation of such Bank
to make Committed Advances in an aggregate amount at any one time outstanding
equal to  the  amount set opposite such Bank's name on the signature pages
hereof under the caption  "Commitment" (as  the  same may be reduced pursuant to
Section  2.5 hereof).

     "Other Currency" is defined in Section 6.1.1.

     "Permitted  Currency" shall mean Dollars and Canadian  Dollars, and such
other currencies  of  major industrialized  nations as shall be designated  by
the Company and  acceptable to the Agent and  the  Issuer, each in their sole
and absolute discretion.
     
     "Reimbursement   Obligations"   shall   mean   the obligation  of the
Company to reimburse the Issuer  and the Banks, as applicable, for the
Dollar Equivalent of the drawings made under the Letters of Credit, or  any
of the Letters of Credit.
     
     "Stated  Amount" shall mean, with respect to any Letter  of  Credit, the
Dollar equivalent   amount available to be drawn under such Letter of
Credit  upon the issuance thereof.

     "Stated  Expiry Date" of each Letter of Credit  is defined in Section 2.10.
B The subsection (b) of the definition of "Indebtedness" in Section 1.1 of the
Credit Agreement is amended in its entirety as follows:
          "     (b)   all obligations relative to the Dollar Equivalent  of the
          face amount of all  letters  of credit, including, without limitation,
          the Letters of Credit, and banker's acceptances issued for the 
          account of such Person or other Approved  Account Party;"
          
    C.    The definition of "Applicable Margin" in Section 1.1 of
the  Credit Agreement is amended by inserting after the words "LIBOR Advance" in
the first line thereof the phrase "or in connection with the issuance of a
Letter of Credit".

    D.    The definitions of  "Adjusted  Available  Facility Amount", "Advance",
"Advance Request", "Available  Facility Amount", "Commitment", "Commitment
Proportion", "Drawdown  Date", "Facility", "Loan Document", "Majority Banks",
"Obligations"  and "Total  Commitments" in Section 1.1 of the Credit  Agreement
are respectively amended in their entirety as follows:
"Adjusted  Available Facility Amount" shall  mean, at any time and in respect of
any proposed Advance, the Available Facility Amount at such time:

(i)  increased to  take account of any  Advances which shall become repayable on
or before the Drawdown Date of the proposed  Advance in question and to take
into account any decrease in  Letter of Credit Outstandings which shall become
effective
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        on or before such Drawdown Date; and (ii) reduced to take account of any
        Advance  which is to be made on or before such Drawdown Date (but
        excluding  the  proposed  Advance   in question) and  to  take  into
        account   any increase  in Letter  of Credit  Outstandings which
        shall become effective on  or  before such Drawdown Date and to take 
        account of any reduction  in  the Total  Commitments  which shall become
        effective on  or  before  such Drawdown Date.

     "Advance" shall mean, except as otherwise provided herein, any  LIBOR
Advance, Reference  Rate  Advance, Competitive Bid Advance and/or issuance of
any  Letter of Credit or the extension of the Stated Expiry Date of any Letter
of Credit.

     "Advance  Request"  shall mean any LIBOR Advance Request, Reference Rate
Advance Request, Competitive Bid Advance Request or Issuance Request.

     "Available Facility Amount" shall mean at any time the Total Commitments
less the sum of (i) the  Advance Outstandings at such time and (ii) the Letter
of Credit Outstandings at such time.

     "Commitment" means, as the context may require,  a Bank's or Issuer's
Letter of Credit Commitment or  Loan Commitment.

     "Commitment Proportion" shall mean, in relation to a Bank,  at  any  time
the proportion which its Loan Commitment bears to the Total Commitments at such
time.

     "Drawdown Date" shall mean: (i) in relation to any LIBOR Advance, the
Business Day for the making thereof as specified in the LIBOR Advance Request
relating thereto; (ii)  in  relation to any  Reference Rate Advance, the
Business Day for the making  thereof as specified in the Reference Rate Advance
Request relating  thereto; (iii) in relation to any Competitive Bid Advance, the
Business Day for the making thereof as specified in the Competitive Bid Advance
Request relating thereof or as agreed to between the Company and a Bank pursuant
to Article 5, and(iv)in relation to any issuance of a Letter of Credit, the
Business Day for the issuance thereof as specified in the Issuance Request
relating thereto.

     "Facility" shall mean the committed advance facility  which may be utilized
subject  to  the other terms and provisions hereof for LIBOR Advances, Reference
Rate Advances and the issuance of Letters of Credit which is evidenced by the
Revolving Notes and Competitive Bid Advances which is evidenced by the
Competitive Bid Notes.

     "Loan Document" means this Agreement, the  Notes, each Advance Request,
each Letter of Credit and any other agreement, document or instrument from time
to time executed and delivered  pursuant to and in connection with any of the
foregoing.
     
     "Majority  Banks" shall mean, at  any  time  while Commitments are in
effect, Banks having at least 51% of the aggregate amount of the Commitments
and,  at  any time while no Commitments are in effect, Banks holding at least
51%  of the outstanding aggregate  principal amount  of the  Advances  and  the
Letter of Credit Outstandings.
     
     "Obligations" means all obligations  (monetary  or otherwise) of the
Company arising  under or in connection with this Agreement, the Notes, any
Letters of Credit and each other Loan Document.
     
     "Total Commitments" shall mean the aggregate  from time to time of the
     Banks' Loan Commitments.
     E .   Section 1.2 (i) of the Credit Agreement is amended in its entirety to
read as follows:
     "         (i)   any of the "Company," the "Agent",  the
               "Issuer" or the "Banks" shall be construed so
               as  to  include their respective  successors, permitted  assigns
               and, in the  case  of  the Banks, transferees;".
               
     F.    Section 2.1 of the Credit Agreement is amended by  (x)
deleting  the "and" at the end of clause (ii), (y) replacing the period  at  the
end of clause (iii) with "; and"; and (z) by inserting the following clause (iv)
following  clause  (iii) thereof:

     "         (iv)  the Issuer agrees that it will issue Letters  of Credit
denominated in a Permitted Currency in accordance with Section 2.10, and each
Bank  severally  agrees  that  it  will purchase participation  interests  in
such Letters  of Credit in accordance with Section 2.10.4."
     G     Section 2.2 of the Credit Agreement is amended in  its
entirety to read as follows:

     "     Section 2.2    Maximum Outstandings.  Subject  to
     cancellation and reduction in accordance with the terms hereof, the maximum
     aggregate principal amount  of  the Facility which may be utilized at any
     time for Advances and the issuance of Letters of Credit is $200,000,000.
     In no event, however, shall (a) the sum of (i)aggregate Advance
     Outstandings at any  time  and (ii) aggregate Letter of Credit Outstandings
     at any time exceed the principal amount
     
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     of $200,000,000 or such lesser amount as from time to time may result from
     any reduction  pursuant to Section 2.5 hereof, or (b) the aggregate  Letter
     of Credit Outstandings  at  any time exceed the Letter of Credit Commitment
     Amount."

     H . Section   2.5 of the Credit Agreement is amended in  its entirety to
read as follows:

          Section  2.5    Changes in Commitments Section  2.5 Changes in
     Commitments.  The Company shall  have  the right in  accordance  with
     Section 7.1  hereof to terminate or reduce the amount of the Commitments
     at any time or from time to time to an amount not less than the sum of (i)
     Advance Outstandings, if any, and (ii) Letter of Credit Outstandings, if
     any, at the effective date of such termination or reduction, upon not less
     than three (3) Business Days' prior notice to the  Agent  (which shall
     promptly notify the Banks) of each such termination or reduction, which
     shall specify the effective date thereof and the amount of any such
     reduction (which shall not be less than $5,000,000 and, if more than
     $5,000,000, in integral multiples of $1,000,000) and shall be irrevocable
     and effective only upon receipt by the Agent.   The Commitments once
     terminated or reduced may not be reinstated."

     I.    Section 2.6 of the Credit Agreement is hereby amended by  inserting
     the following subsection (c) following  subsection (b):
     "    (c)  Letter of Credit Fees.  The Company agrees to pay:

          (i)  to  the Agent for the account of each Bank  a nonrefundable
               issuance fee equal to the rate per annum equal to the Applicable
               Margin on the  Stated  Amount of each  such  Letter  of Credit,
               in  each case multiplied  by such Bank's Commitment Proportion,
               such fees being payable quarterly in arrears on each Quarterly
               Date  and on the  Final  Repayment Date; and
          (ii) to  the Agent for its own account a non refundable fronting fee
               equal to 0.0625% of the Stated Amount of each such Letter of
               Credit, such fee being payable quarterly in arrears on each
               Quarterly Date and on the Final Repayment Date, together with
               customary administrative, issuance, amendment, payment and
               negotiation charges incurred by the Issuer in connection with
               such Letter  of Credit."
     J.    . Subsection  2.8(b) of the Credit Agreement is hereby amended in its
     entirety to read as follows:
     "     (b)   If, at any time, the sum of (i) the outstanding aggregate
     principal amount of the Advances and (ii) the Letter of Credit Outstandings
     exceeds the aggregate amount of the Commitments as then in effect, the
     Company shall (i) pay or prepay the Advances  and (ii)   deposit Cash
     Collateral with the Agent in accordance with  the provisions of Section
     2.10.7 on such date in an aggregate principal amount equal to the excess,
     together with interest thereon accrued  to  the date  of such payment or
     prepayment and  any  amounts payable pursuant to Section 8.11 hereof in
     connection therewith.  If, at any time, the  Letter of Credit Outstandings
     exceeds the Letter of Credit  Commitment Amount as  then in effect, the
     Company shall deposit Cash  Collateral with the Agent in accordance with
     the provisions  of  Section 2.10.7  on  such date in an aggregate principal
     amount equal to such excess."
     K.     Article 2 of the Credit Agreement is hereby amended by inserting the
     following Section 2.10 following Section 2.9:

     "Section  2.10 Letters of Credit.   The  Issuer agrees  to issue under the
     several obligations  of  the Banks in  accordance with their respective
     Letter  of Credit Commitments, or extend the Stated  Expiry  Date of,  from
     time  to time on any Business Day  occurring prior  to the Final Repayment
     Date, one or more standby letters of credit (herein individually referred
     to as a "Letter  of  Credit" and collectively  referred  to  as "Letters of
     Credit") denominated in a Permitted Currency  at  the request of the
     Company and for the account and for the general purposes of the Company  or
     an Approved Account Party.  Each Letter of Credit shall be substantially
     upon such terms as the  Company may specify in an Issuance Request therefor
     duly executed by an Authorized Signatory of the Company and delivered to
     the Issuer and the Agent on or before 11:00  a.m., New York time, on a
     Business Day, at least three  (3) Business  Days  before the requested
     issuance of such proposed Letter of Credit.  Each Letter of Credit  must be
     in form and substance satisfactory to the Issuer, in its sole discretion,
     and shall have a fixed expiration date (with  respect  to  each Letter of
     Credit, its "Stated Expiry Date") occurring not later than one year after
     the date of the issuance thereof (and in no event later than the Final
     Repayment Date, as in effect from time  to time).   Each Bank (other  than
     the Issuer) severally agrees that it will hold participation interests in
     each  Letter of Credit as provided to Section 2.10.1. The Issuer will make
     available to the beneficiary thereof the original of each Letter of Credit
     which it issues hereunder and will notify the beneficiary under any Letter
     of Credit of any extensions of the Stated Expiry Date thereof.  In the
     event that any Letters of Credit remain  outstanding after the Final
     Repayment Date, upon such Final Repayment Date, the Company (if it has not
     already done so)  shall  deposit with the Agent an amount in  cash equal to
     the aggregate amount of  Letter  of  Credit Outstandings attributable to
     such Letters of Credit, which  cash amount shall be held as Cash Collateral
     in accordance with the provisions of Section 2.10.7.
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     Section  2.10.1 Other Banks' Participation.   Upon the  issuance of  each
     Letter of Credit,  and  without further action, each Bank (other than the
     Issuer) shall be  deemed  to  have  irrevocably and  unconditionally
     purchased,  to the extent of its Commitment Proportion, a  participation
     interest in such  Letter  of Credit. Each  Bank  shall,  to
     the extent  of  its  Commitment Proportion,  be  responsible for
     reimbursing  promptly (and in any event within one (1) Business Day),
     without setoff, deduction or  counterclaim,  the  Issuer  for
     Reimbursement Obligations which  have  not  been reimbursed by the
     Company in accordance with Section  2.10.2.  Without limiting the
     foregoing, the Issuer  will promptly notify the Banks of the  issuance of
     each Letter of Credit.
     
Section 2.10.2 Company's Agreement to Repay Letter of Credit Drawings.  The
     Company hereby irrevocably and unconditionally agrees to reimburse the
     Issuer, forthwith, for each payment or disbursement made by the Issuer to
     settle its obligations under any draft  drawn under any Letter of Credit,
     with interest on the amount so  paid  or disbursed by the Issuer from and
     including the date  of  payment  or  disbursement  to  but  not including
     the date the Issuer is reimbursed  therefor, at  a  fluctuating rate per
     annum equal to (i) for each day  in the period commencing on and including
     the  day such  payment or disbursement is made to and  including the date
     three (3) Business Days after the Issuer gives notice  of such payment or
     disbursement to the Company, the Reference Rate from time to time in effect
     or such other higher interest rate, if any, then applicable  to Reference
     Rate Advances,  and  (ii)  for any day thereafter  to but not including the
     day of payment  in full,  the sum of the Reference Rate from time to  time
     in  effect  plus  two percent (2%).  The  Issuer shall promptly  give
     notice  to the  Company  by  telephone, confirmed by  telecopy  to  the
     Company's   treasury
     department, of each receipt by the Issuer of a  drawing under  a Letter of
     Credit that appears on its face  to conform  to the requirements of such
     Letter of  Credit. No  later  than 11:00 a.m., New York time, on  the  day
     which  is  three (3) Business Days after  the  date  on which  a payment to
     a beneficiary of a Letter of Credit occurs pursuant to a draw thereunder,
     the Company shall pay  to  the Issuer in immediately available funds  for
     its account at the Payment Office the amount  of  such draw plus accrued
     interest at the rate set forth above. The  foregoing notwithstanding, the
     obligation  of  the Company  to  reimburse the Issuer  is  not  subject  to
     demand  thereof  by the Issuer (or any  Bank)  and  any failure  by  the
     Issuer (or any Bank)to  notify  the Company  pursuant  to the provisions
     of  this Section shall  in  no  way  affect or impair the  Reimbursement
     Obligations of the Company under the Letter of  Credit, this Agreement, the
     Issuance Requests or any other Loan Document.
     Section  2.10.3  Absolute Duty  to  Reimburse  for Letter  of Credit
     Liabilities2.10.3 Absolute  Duty  to Reimburse  for  Letter of  Credit
     Liabilities.  Any provision  in  this  Agreement or in  any  other  Loan
     Document to the contrary notwithstanding, the Company's obligation  to 
reimburse the Issuer and the  Banks,  as applicable,
for any payment or disbursement under or in connection with a Letter of Credit
shall  be  absolute and  unconditional under  any  and  all  circumstances
without and irrespective of any setoff, counterclaim or other defense to payment
which the Company may have  or have  had  against the Issuer or any Bank or any
other Person.   Without  limiting  the  generality of the foregoing, the Company
assumes all risks of the acts or omissions of  any  beneficiary or  transferee
of  any Letter  of Credit with respect to its use of the Letter of  Credit and
none of the Issuer, any Bank or  any  of their  respective officers or directors
shall be liable or responsible for (i) the use which may be made of any Letter
of  Credit  or  any acts or  omissions  of any beneficiary  or  transferee  in
connection  therewith, (ii) the  validity,  sufficiency  or  genuineness of
documents, or of any endorsement thereon, even if  such documents  should prove
to be in any  or  all  respects invalid,  insufficient, fraudulent or forged
(and  each of the Issuer, any Bank, and any corresponding bank may accept
documents that appear on their face  to  be  in order, without responsibility
for further investigation, regardless of any notice or  information to  the
contrary), (iii) the  enforceability  of  any instrument or document which is
supported by  a  Letter of  Credit,  or (iv) any other circumstances whatsoever
in  making or failing to make payment under any  Letter of  Credit  other  than
as a  result  of  the willful misconduct  or gross negligence by the Issuer  or
such Bank.   None of the foregoing shall affect, impair,  or prevent the
vesting of any of the  rights  or  powers granted   the Issuer  or  any  Bank
hereunder.  In furtherance  and  extension, and not in  limitation  or
derogation,  of any of the foregoing, any action  taken or omitted to be taken
by the Issuer in good faith (and not constituting gross negligence or wilful
misconduct) shall  be  binding upon the Company and each  Bank  and shall not
put such Issuer under any resulting liability to the Company or any Bank, as the
case may be.

            Section  2.10.4 Reimbursement Obligations  of  the Banks
under  the Letters of Credit.   If  the  Company shall  fail pursuant to the
terms  of  Section  2.10.2 forthwith  to reimburse the Issuer for each payment
of disbursement   made  by  the Issuer  to        settle its obligations under
any draft drawn under
any  Letter  of Credit, then upon demand by the Issuer each Bank shall forthwith
make available to the Issuer at the  Payment Office  (or  other  office or
branch  of  a  financial institution  which Issuer may designate  from  time  to
time  by written  notice  to  the  Banks)  immediately available  funds in an
amount equal to such Bank's  pro rata  share  (according  to its  respective
Commitment Proportion) of the amount so paid or disbursed  by  the Issuer.
Each  Bank shall indemnify and hold harmless the  Issuer  from  and  against
any  and  all  losses, liabilities (including, without limitation, liabilities
for penalties, actions, suits, judgments, demands  and damages)  costs   and
expenses  (including, without limitation,  attorneys' fees and  expenses)
resulting from  any  failure on the part of such Bank to provide, or  from  any
delay in providing, the Issuer with  such Bank's share  of  the
<PAGE>
amount  of  any   payment or disbursement   made  by  the  Issuer  to   settle
its obligations under any draft drawn under any  Letter  of Credit  in
accordance  with  the  provisions  of the preceding sentence.
     The obligations of each Bank to provide the Issuer with  such Bank's pro
rata share of the amount  of  any payment  or disbursement made by the Issuer
to settle its  obligations under any draft drawn under any Letter of  Credit  in
accordance with the provisions  of  the preceding paragraph shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff,  counterclaim or defense to payment which  such Bank may  have  or  have
had  against  the Issuer, including, without limitation, any defense based on
the failure of the demand for payment under such Letter  of Credit to conform to
the terms of such Letter of Credit or the legality, validity, regularity or
enforceability of  such Letter of Credit AND INCLUDING BUT NOT LIMITED TO  THOSE
RESULTING FROM THE ISSUER'S  OWN  SIMPLE  OR CONTRIBUTORY  NEGLIGENCE; provided,
however,  that  no Bank shall  be  obligated  to  reimburse  the Issuer pursuant
to the preceding provisions of this  Section 2.10.4 for any wrongful payment or
disbursement made by the  Issuer under any Letter of Credit as a  result  of 
acts  or  omissions constituting gross negligence  or willful misconduct on the
part of the Issuer or any of its officers, employees or agents.

            Section  2.10.5 Letter of Credit Operations.  The Issuer
shall, promptly following its receipt  thereof, examine all documents purporting
to represent a demand for payment by a beneficiary under a Letter of Credit to
ascertain that the same appear on their face to  be in  conformity  with the
terms and conditions  of  such Letter  of  Credit.  If, after examination, the
Issuer shall  have determined that a demand for payment under such Letter of 
Credit does not conform to the terms and conditions of such Letter of Credit, 
then the Issuer shall, as soon as reasonably practicable, give notice to such 
beneficiary to the effect that such demand for payment  was  not  in accordance
with  the  terms  and conditions  of  such Letter  of Credit,  stating  the 
reasons  therefor.   Thereupon, such beneficiary  may attempt  to correct any 
such non-conforming demand for payment under  such Letter of Credit if,  and  
to the extent that, such beneficiary is  entitled  (without regard to the 
provisions of this sentence) and able  to do  so.  The Issuer hereby further 
agrees to notify the Company of any demand for payment by  a  beneficiary under
a Letter of Credit  which  in  the  Issuer's determination  does  not  conform 
to the terms and conditions of the relevant Letter of Credit; provided,
however, that failure to give any such notification  to the  Company shall not 
affect or otherwise  impair  the Company's obligations hereunder or under the  
Issuance Request  or  any other Loan Documents nor  subject  the Issuer  to  any
claim or liability.  After  determining that  a  demand for payment under such 
Letter of Credit conforms  to  the  terms  and conditions thereof,  the Issuer
shall make available to such  beneficiary, in immediately available funds, the 
amount so demanded  in accordance with the terms of such Letter of Credit.

     Section  2.10.6 Action With Respect to Letters  of Credit Upon Occurrence
of Default.  Upon the occurrence of  a Default under Sections (e) or (f) of
Article  12, an  amount  equal to the amount of the then  contingent liability
of  the Issuer (and the other  Banks)  under each  outstanding  Letter of Credit
shall be,  without demand  upon  or  notice to the Banks,  and,  upon the
occurrence  of  any other Event of Default,  an  amount equal to the amount of
the then contingent liability of the Issuer (and the other Banks) under each
outstanding Letter  of Credit shall be, at the option of the  Agent and  without
demand upon or notice to the Banks, deemed (as  between the Company and the
Issuer) to have  been paid  or disbursed by the Issuer under such Letters  of
Credit  (notwithstanding that such amount  may  not  in fact  have been so paid
or disbursed), and the  Company shall  be  obligated (i) forthwith  to
reimburse  the Issuer  for the amount deemed to have been so  paid  or disbursed
by the Issuer, and (ii) if the Issuer, in its discretion, so demands, to pay to
the Issuer, forthwith on  demand, such additional amounts as may be  required so
that the aggregate of all amounts previously paid by the Company  to the Issuer
under this Section  2.10.6, and  not theretofore applied to the payment of
amounts payable  by  the Company to the Issuer with respect  to such  Letter  of
Credit shall equal the amount  of  the then  contingent liability of the Issuer
(and the other Banks) under such Letter of Credit.  Such amount  shall be paid
by depositing Cash Collateral with the Agent in accordance with the provisions
of Section 2.10.7.

     Section    2.10.7   Procedures   for   Depositing, Investing and Returning
of Cash Collateral.   Any  cash collateral  amounts received by the Agent
pursuant  to the  provisions  of  Section 2.8(b),  Section 2.10 or Section
2.10.6 (such cash collateral amounts, the "Cash Collateral")  shall be deposited
in a  cash collateral account (the   "Letter  of  Credit  Cash   Collateral
Account")  maintained at the offices of  the  Agent  or such other  Bank or
other Person acting as bailee  for the  Agent  as the Agent shall designate but
under  the sole  dominion and control of the Agent  and  shall  be retained by
the Agent for the pro rata benefit  of  the Issuer  and the Banks in accordance
with the Letter  of Credit   Outstandings  owing  to  them  as collateral
security  for,  and the Company hereby  grants  to  the Agent and its bailees or
agents for the benefit of  the Issuer, the Agent and the Banks a security
interest  in such  Cash Collateral including all interest  accruing thereon  and
the proceeds thereof.  The Company further agrees that the Agent shall have all
of the rights  and remedies   of   a  secured  party under  the  Uniform
Commercial  Code as adopted in the State  of New  York with  respect  to such
security interest  and  that  an Event  of Default under this Agreement shall
constitute a  default for purposes of such security interest.  Any amounts  so
received by the  Agent  pursuant  to  the provisions of the preceding sentence 
shall be held  as collateral  security for, first, the repayment  of  the 
Company's Obligations in connection with the Letters of Credit  and  then the 
other Obligations of the  Company under  or  in  connection with this Agreement
and any other  Loan Documents.  If and to the extent  that (a) all
<PAGE>

Obligations of the Company in connection with  the Letters  of  Credit have been
fully paid and satisfied, and (b) the commitments and obligations of the  Issuer
(and  the other Banks) under the Letters of Credit  and related documents have
terminated, the Agent shall  pay to  the Company, upon the Company's request
therefor, all amounts previously paid to the Agent by the Company pursuant  to
this Section 2.10.7 and accrued  interest thereon  to  the extent but only to
the  extent  such amounts or accrued interest  were  not  theretofore applied by
the Agent to reduce amounts payable  by  the Company  to the Issuer or the Banks
under such  Letters of  Credit  or include any other Obligation;  provided,
however,  that  if any Advances are outstanding  as  of such  date, the Bank may
continue to hold such  amounts and  accrued interest as security for the Loans
and may thereafter  apply such amounts and accrued interest to the  payment of
the Loans and/or any other Indebtedness secured thereby.  All amounts on deposit
in the  Letter of Credit  Cash  Collateral Account may,  until  their
application  to any Obligation or their return  to  the Company,  as the case
may be, at the Company's  written request,  be  invested  in Cash Equivalent
Investments designated by  the  Company,  which  Cash  Equivalent Investments
shall be held by the Agent  as  additional collateral security for the repayment
of the  Company's Obligations under and in connection with the Letters of Credit
and all other Obligations.  Any losses, net  of earnings, and reasonable fees
and expenses of such Cash Equivalent Investments shall be  charged  against  the
principal  amount invested.  The Agent, the Issuer and the Banks  shall not be
liable for any loss  resulting from  any Cash  Equivalent Investment made at the
Company's request. The Agent is not obligated  hereby, or  by any other Loan
Document, to make or maintain any Cash Equivalent Investment, except upon
written request by the Company."

     L.    Section 6.1 of the Credit Agreement is amended in its entirety to
read as follows:
     "     Section  6.1 Currency Conversion and Currency Indemnity.
     
     Section  6.1.1  Payments in Agreed  Currency 
The Company  shall  make payment  relative  to  each  Advance  or
Reimbursement Obligation in Dollars (the "Agreed Currency").  If any payment is
received on account of any Advance  in  any currency  (the "Other Currency")
other than the Agreed Currency (whether voluntarily or pursuant to an  order or
judgment  or  the enforcement  thereof  or the realization of any security or
the liquidation of the Company or otherwise howsoever), such  payment  shall
constitute a discharge of the liability of the  Company hereunder and under the
other Loan Documents in respect of such obligation only to the extent of the
amount of the Agreed Currency which the relevant Bank, the Issuer or  the Agent,
as the case may be, is able to purchase with  the amount of the Other Currency
received  by  it before  noon on the date of such receipt,  or,  if  the amount
of the Other Currency is received after  noon, the  Business  Day  next
following such receipt, in accordance  with  its  normal procedures and after
deducting any premium and costs of exchange.
     
     Section 6.1.2  Conversion of Agreed Currency  into Judgment Currency.  If,
for the purpose of obtaining or enforcing  a judgment in any court in any
jurisdiction, it becomes  necessary  to convert  into  a  particular currency
(the "Judgment Currency") any amount  due  in the  Agreed Currency then the
conversion shall be  made on  the basis of the rate of exchange prevailing on
the day  on which judgment is given (unless such day is not a  Business Day in
which case the conversion  shall  be made on the basis of the rate of exchange
prevailing on the  Business  Day  next preceding the  day  of  which judgment
is given) and in any event the Company  shall be obligated to pay the Agent, the
Issuer and the Banks any  deficiency in accordance with Section 6.1.1. For the
foregoing  purposes "rate of exchange"  means  the rate  at  which  the relevant
Bank, the Issuer  or  the Agent,  as  applicable, in accordance with  its
normal banking  procedures  is able on the  relevant  date  to purchase the
Agreed Currency with the Judgment Currency after deducting any premium and costs
of exchange.
     
     Section   6.1.3   Circumstances  Giving  Rise   to Indemnity.   If (i) any
Bank, the Issuer or  the  Agent receives  any  payment or payments on  account
of  the liability  of  the Company hereunder  pursuant  to  any judgment  or
order in any Other Currency, and (ii)  the amount of the Agreed Currency which
the relevant  Bank, the Issuer  or the Agent, as applicable,  is  able  to
purchase on  the  Business  Day  next  following  such receipt  with the
proceeds of such payment or  payments in  accordance with  its normal procedures
and  after deducting  any premiums and costs of exchange  is  less than  the
amount of the Agreed Currency due in  respect of  such obligations immediately
prior to such judgment or  order,  then the Company on demand shall,  and  the
Company hereby agrees to, indemnify and save the Banks, the  Issuer and the
Agent harmless from and against any loss,  cost  or expense arising out of or in
connection with such deficiency.
     
     SECTION 6.1.4  Indemnity Separate Obligation.  The agreement  of  indemnity
provided for  in  Section  6.1 shall constitute an obligation separate and
independent from all other obligations contained in this Agreement, shall give
rise to a separate and independent cause  of action,  shall apply irrespective
of  any  indulgence granted by the Banks, the Issuer or the Agent or any of them
from  time  to time, and shall continue  in  full force  and effect
notwithstanding any judgment or order for  a  liquidated  sum in respect  of  an
amount  due hereunder or under any judgment or order."
     
     M.    Subsection 6.4(i)(b) of the Credit Agreement is hereby amended in its
entirety to read as follows:
          "(b) second, in or toward payment to the Banks of  such amount  as  is
required to repay the Advances and the Reimbursement Obligations, including
accrued interest thereon, which
<PAGE>
have fallen due, and if insufficient to pay all principal and interest then due
thereon shall be applied first to payment of interest and then to principal;
and"

     N.    Sections  8.4,  8.5, 8.6 and the first and second sentence  of
Section 8.7 of the Credit Agreement are amended by (i) inserting after each use
of the word "Bank" the  phrase  "or the Issuer" and (ii) inserting after each
use  of the word "Bank's" the phrase "or the Issuer's".
     O .   The Preamble to Article 11 of the Credit Agreement is hereby amended
in its entirety to read as follows:
     "     The Company agrees with the Agent, the Issuer and each Bank that so
     long as any of the Commitments are in effect and until payment in  full of
     all Advances hereunder (other than pursuant to any continuing
     indemnification obligations under this Agreement), all interest thereon and
     all other amounts payable  by  the Company  hereunder remains outstanding,
     and until all Letters of Credit shall have expired or been terminated and
     the  Issuer and the Banks shall have  no  further obligation or liability
     under any Letter of Credit, the Company will perform the obligations set
     forth in  this Article 11:".
     Article 12 of the Credit Agreement is hereby amended by (i) amending clause
     (a) in   its entirety to read as follows:
     
     "         (a)  The Company shall default in the payment when  due  (i) of
     any principal of any Advance  or  any Reimbursement Obligation  (and  such
     default shall continue  unremedied for a period of two (2)  Business Days),
     or (ii) of any interest on any  Advance, any Reimbursement Obligation or
     any fees  payable  by the Company hereunder or in connection herewith, or
     of  any other monetary Obligation  (and  such  default  shall continue
     unremedied for five (5) Business Days); or "

;  (ii) amending clause (i) thereof by inserting after the  word "Advance"  the
phrase ", all Letter of Credit Obligations";  and (iii)  amending clause (ii)
thereof by inserting after  the  word "Advance" the phrase ", all Letter of
Credit Obligations".

     Q.    Section 13.1 of the Credit Agreement is hereby amended by (i)
amending the first sentence thereof in its  entirety  to read as follows:
     "Each  Bank  hereby irrevocably appoints and authorizes the Agent to act as
     its agent and CIBC to act  as  the Issuer under  and for purposes of this
     Agreement,  the Notes and the other Loan Documents with such powers  as are
     specifically delegated to the Agent or the  Issuer by the terms of this
     Agreement, the Notes and the other Loan Documents, together with such other
     powers as  are reasonably incidental thereto."
     
     and  (ii)  amending the second and third sentence  thereof  by inserting
     after each use of the word "Agent" the phrase  "or  the Issuer".
     
     R.    The first sentence of Section 13.2 and Section 13.3 of
the Credit Agreement are hereby amended by inserting after  each use of the word
"Agent" the phrase "or the Issuer".

     S.    Section 13.4 of the Credit Agreement is hereby amended by (i)
amending the first sentence thereof by inserting (a) after the  first use of the
word "Agent" the phrase "or the Issuer" and (b) after the second use of the word
"Agent" the phrase "and the Issuer";  and  (ii) amending the second  sentence
thereof  by inserting (a) after the first use of the word "Agent" the  phrase ",
the Issuer", (b) after the second use of the word "Agent" the phrase  "or the
Issuer", and (c) after the third use of the  word "Agent" the phrase "and the
Issuer".

     T.    Section 13.5 of the Credit Agreement is hereby amended by  (i)
amending the first sentence thereof by (a) replacing  the phrase  "the Agent and
its officers" with the phrase  "the Agent and  the Issuer and their officers",
and (b) inserting after  the second  use  of the word "Agent" the phrase "or the
Issuer";  and (ii) amending the second sentence thereof in its entirety to read
as follows:
     "The  obligation  of  the Banks in this  Section  shall survive  the
     payment of the Advances, the Letter of Credit Outstandings and of any other
     sums due from Company hereunder and the termination of the Commitments."

     U.    Section 13.6 of the Credit Agreement is hereby amended by  (i)
amending  the first sentence thereof by inserting  after each  use  of  the
word "Agent" the phrase ", the  Issuer"; and (ii) amending the second sentence
thereof by inserting after  the word  "Agent"  the phrase " and the Issuer";
(iii)  amending  the third  sentence thereof by (a) inserting after the first
use  of the  word "Agent" the phrase "or the Issuer", (b) inserting after the
second use of the word "Agent" the phrase "and the  Issuer", and (c) after the
third use of the word "Agent" the phrase ", the Issuer";  and  (iv)  amending
the  fourth  sentence  thereof  by inserting after the word "Agent" the phrase
"or the Issuer".

     V.    Section 13.7 of the Credit Agreement is hereby amended by  (i)
inserting  after the first use of the word  "Agent"  the phrase  "or the
Issuer"; and (ii) inserting after the second  use of the word "Agent" the phrase
"and the Issuer".

     W.    Section 13.8 of the Credit Agreement is hereby amended by (i)
amending the first sentence thereof by inserting after the word  "Agent" the
phrase ", the Issuer"; (ii) amending the second sentence thereof by inserting
after each use of word "Agent"  the phrase "or the Issuer"; (iii) amending the
third sentence thereof by  (a)  inserting after the word "agent" the phrase "or
issuer", and  (b) inserting after the word "Agent" the phrase "or Issuer"; (iv)
amending the fourth sentence thereof by inserting after  the word  "Agent"  the
phrase "or the Issuer"; and (v)  amending  the fifth  sentence thereof by (a)
inserting after the word "Agent's" the  phrase ", Issuer's", and (b) inserting
after each use of the word "Agent" the phrase ", the Issuer".

     X.    Section 14.1 of the Credit Agreement is hereby amended by inserting
after the word "Agent" the phrase ", the Issuer".

     Y.    Section 14.4 of the Credit Agreement is hereby amended by  (i)
amending the second sentence thereof by inserting  after each  use  of the word
"Agent" the phrase " and the Issuer";  and (ii)  amending the third sentence
thereof by inserting after each use of word "Agent" the phrase ", the Issuer".

     Z.    Section 14.5 of the Credit Agreement is hereby amended by inserting
after each use of the word "Co-Agents" the phrase ", the Issuer".

     AA.  Subsection 14.7(a) of the Credit Agreement  is  hereby amended  by
           inserting after the word "Agent" the phrase "and  the Issuer".

     BB.   Subsection 14.7(e) of the Credit Agreement  is  hereby
amended  by inserting after each use of the word "Co-Agents"  the phrase ", the
Issuer".

     CC.   Section 14.8 of the Credit Agreement is hereby amended by inserting
after the word "Agent" the phrase ", the Issuer".

     DD.  Subsection 14.9(ii) of the Credit Agreement is  hereby amended  by
inserting after the word "Advances"  the  phrase  ", Letter of Credit
Outstandings".

     EE.  Sections 14.11, 14.19 and 14.20 of the Credit Agreement are hereby
amended by inserting after the word "Agent" the phrase ", the Issuer".

     FF.  Section 14.21 of the Credit Agreement is hereby amended by  (i)
inserting  after the first use of the word  "Banks"  the phrase ", the Issuer"
and (ii) inserting after the second use  of the word "Agent" the phrase ", the
Issuer".

     GG.  Exhibit I to the Credit Agreement is amended in its entirety to read
as provided in Exhibit I hereto.  All references in  the Credit Agreement to
Exhibit I shall be deemed to refer to Exhibit I hereto.

     HH.  The  Credit Agreement is amended by adding  Exhibit  L hereto  as 
Exhibit L to the Credit Agreement.  All references in the Credit Agreement to 
Exhibit L shall be deemed to  refer  to Exhibit L hereto.


     II.  The  Credit Agreement is amended by adding Schedule  A hereto as 
     Schedule A to the Credit Agreement.  All references  in the  Credit 
     Agreement to Schedule A shall be deemed to  refer  to Schedule A hereto.

     SECTION    2.       Conditions   to   Effectiveness.  The effectiveness  of
this Amendment is conditioned upon  receipt  by the  Agent  of  all of the
following, each in form and  substance satisfactory  to  the Agent, and in
sufficient number  of  signed counterparts to provide one for each Co-Agent and
each Bank, (i) counterparts  of  this Amendment, executed by  the  Company,
the Banks, the Co-Agents and the Agent and (ii) such other documents as the
Agent may reasonably request.

     SECTION  3.     Representations and Warranties.   To  induce the  Banks,
the  Co-Agents  and the Agent  to  enter  into  this Amendment,  the Company
hereby reaffirms, as of the date  hereof, its  representations and warranties
contained in Article X of the Credit Agreement and in each other Loan Document
to which it is a party  (except to the extent such representations and
warranties relate solely to an earlier date) and additionally represents and
warrants as follows:

     A.   Authorization; No Conflict.  The execution and delivery of  this
Amendment  and the performance by the  Company  of  its Obligations under this
Amendment, the Credit Agreement as amended by  this Amendment, and the other
Loan Documents, are within  the Company's  powers,  have been duly authorized
by  all  necessary action, have received all necessary governmental approval (if
any shall  be  required), and do not and will not contravene  or  conflict
with  any provision  of  law  or  of  the  articles of incorporation or bylaws
of the Company, or of any material  agreement binding upon the Company.

     B.    Validity and Binding Nature.  This Amendment  and  the Credit
Agreement as amended by this Amendment are  legal,  valid and  binding
obligations of the Company, enforceable against  the Company in accordance with
their respective terms subject  as  to enforcement only to bankruptcy,
insolvency, reorganization,  moratorium  or  other  similar  laws  affecting
the  enforcement  of creditors' rights generally and general principles of
equity.
     C.   Consents.  No  action, consent  or  approval  of,  or registration  or
          filing
<PAGE>
with,  or  any  other  action  by any governmental  authority  is  required  in
connection  with the execution, delivery  and performance  by  the  Company  of
this Amendment, the Credit Agreement as amended by this Amendment,  or any other
Loan Document or the legality, validity, binding effect or  enforceability  of 
this Amendment, the Credit  Agreement  as amended by this Amendment, or the 
other Loan Documents.

     SECTION  4.      Reaffirmation of  Credit  Agreement.   This Amendment
shall  be  deemed to be an  amendment  to  the  Credit Agreement, and the Credit
Agreement, as amended hereby, is hereby ratified, approved and confirmed in each
and every respect. All references  to  the  Credit  Agreement  in  any  other
document, instrument,  agreement or writing shall hereafter  be  deemed  to
refer to the Credit Agreement as amended hereby.


     SECTION  5.     Defined Terms.  Except as amended hereby  or otherwise
indicated, terms defined in the Credit  Agreement  are used in this Amendment
with the same meaning.

     SECTION  6.     Section Captions.  Section captions used  in this
Amendment are for convenience of reference only, and  shall not affect the
construction of this Amendment.

     SECTION  7.      Governing  Law.  THIS  AMENDMENT  SHALL  BE DEEMED  TO BE
A CONTRACT MADE UNDER THE LAWS OF THE STATE OF  NEW YORK, AND FOR ALL PURPOSES
SHALL BE GOVERNED BY AND CONSTRUED  IN ACCORDANCE  WITH  THE  LAWS  OF SAID
STATE,  WITHOUT  REGARD  TO PRINCIPLES  OF CONFLICTS OF LAW.  All obligations of
the  Company and  rights of the Agent, the Co-Agents, the Banks and any  other
holders of the Notes expressed herein or in the Notes shall be in addition to
and not in limitation of those provided by applicable law.

     SECTION  8.      Execution in Counterparts.  This  Amendment may  be
executed  in  any  number of  counterparts and  by  the different  parties  on
separate  counterparts,  and  each   such counterpart shall be deemed to be an
original, but all such  counterparts   shall  together  constitute  but one and
the same Amendment.

     SECTION 9.     Successors and Assigns.  This Amendment shall be  binding
upon the Company, the Banks, the Co-Agents  and  the Agent  and  their
respective successors and assigns,  and  shall inure to the benefit of the
Company, the Banks, the Co-Agents and the Agent and the respective successors
and assigns of the Banks, the  Co-Agent and the Agent; provided, however, that
the  Company may  not  assign or transfer its rights or obligations  hereunder
without the prior written consent of all Banks.

     SECTION  10.    Severability.  In case any provision  in  or obligation
under this Amendment, the Credit Agreement as  amended by  this  Amendment or
any other Loan Document shall be  invalid, illegal  or  unenforceable  in  any
jurisdiction,  the  validity,
legality  and  enforceability of  the  remaining  provisions  or obligations,
or  of such provision or obligation  in  any  other jurisdiction,  shall  not
in any way  be  affected  or  impaired thereby.

     SECTION  11.    No Oral Agreements.  THIS WRITTEN  AMENDMENT TOGETHER  WITH
THE  OTHER LOAN DOCUMENTS  REPRESENTS  THE  FINAL AGREEMENT  BETWEEN  THE
PARTIES AND MAY NOT  BE  CONTRADICTED  BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
     THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. [SIGNATURES
     BEGIN ON FOLLOWING PAGE]
     IN  WITNESS  WHEREOF, the parties hereto  have  caused  this Amendment  to
be executed by their respective officers  thereunto duly  authorized as of the
day and year first above  written  and shall be effective as of such date.


                             PACIFIC GAS TRANSMISSION COMPANY
                             By: /s/ STANLEY C. KARCZEWSKI
                             -----------------------------
                             Name:   Stanley C. Karczewski
                             Title:   Vice President of  Finance, Controller and
                                      Chief Financial Officer
                             
                             CANADIAN IMPERIAL BANK OF COMMERCE, as Agent for
                                  the Banks
                             By:/s/ MARYBETH ROSS
                             --------------------
                             Name:   Marybeth Ross
                             Title:  Authorized Signator
                      
                      
<PAGE>
                             THE BANK OF NOVA SCOTIA, as Co-Agent for the Banks
                             
                             By: /s/ M. BROWN
                             --------------------
                             Name: M. Brown
                             Title: Officer
                             
                             
                             BARCLAYS  BANK PLC, as Co-Agent for the
                             Banks
                             By:  /s/ HELEN L. CALVELLI
                             --------------------------
                             Name:   Helen Calvelli
                             Title:  Director


                             THE FIRST NATIONAL BANK OF CHICAGO, as Co-Agent for
                               the Banks
                              By: /s/ RICHARD WALDMAN
                              --------------------------------------
                              AUTHORIZED AGENT


                              CIBC INC., as a Bank
                              By:  /s/ MARYBETH ROSS
                              -----------------
                              Name:     Marybeth Ross
                              Title:  Authorized Signatory


                              THE BANK OF NOVA SCOTIA, as a Bank


                              By:  /s/ M. BROWN
                              -----------------
                              Name:     M. Brown
                              Title:  Officer


                              BARCLAYS BANK PLC, as a Bank

                              By:  /s/ HELEN L. CALVELLI
                              --------------------------
                              Name:     Helen Calvelli
                              Title:  Director


                              THE FIRST NATIONAL BANK OF CHICAGO, as a Bank
                              By:  /s/ STEVEN P. CAPOUCH
                              --------------------------
                              Name:     Steven P. Capouch
                              Title:  First Vice President

                              BANK OF AMERICA NT & SA, as a Bank
                              By:  /s/ GARY M. TSUYUKI
                              -----------------------
                              Name:  Gary M. Tsuyuki
                              Title: Managing Director


<PAGE>
                             CITIBANK, N.A., as a Bank
                             By:  /s/ SANDIP SEN
                             ----------------
                             Name: Sandip Sen
                             Title:  Vice President
                             Attorney-in-Fact


                             THE FUJI BANK, LIMITED, San Francisco
                             Agency, as a Bank
                             By:  /s/ KEIICHI OZAWA
                             ---------------------
                             Name:   Keiichi Ozawa
                             Title:  Joint General Manager
                             
                             SOCIETE GENERALE, a French bank,  as a Bank
                             By:  /s/ J. BLAINE SHAUM
                             ------------------------
                             Name:   J. Blaine Shaum

                             Title:  Regional Manager
                             SWISS  BANK  CORPORATION,  New  York Branch,
                             as a Bank
                             By:  /s/ KAREN MAYROSE
                             ----------------------
                             Name:  Karen Mayrose
                             Title: Associate Director

                             Banking Finance Support, N.A.
                             By:  /s/ SABINA WU
                             -------------------
                             Name:  Sabina Wu
                             Title: Director
                             Credit Risk Management, N.A.

                             UNITED STATES NATIONAL BANK OF OREGON, as a Bank
                             By:  /s/ DEREK RIDGLEY
                             ----------------------
                             Name:   Derek Ridgley
                             Title:  Vice President
<PAGE>
                   EXHIBIT I Form of Transfer Certificate
                   
To:            [Name and address of Transferee]
                    and
           Canadian Imperial Bank of Commerce, as Agent

From:          [Name of Transferor Bank and Facility Office]

Date:          ___________________, 199____

          Re:  Transfer Certificate - Credit Agreement, dated  as of  May 31,
               1995 (together with all amendments, if any,  from time to time
               made thereto, the  "Credit Agreement") among Pacific Gas
               Transmission Company (the    "Company"),  the    various
               financial institutions as are and may become parties thereto (the
               "Banks"), The Bank of Nova Scotia,  Barclays Bank  PLC  and The
               First National Bank of Chicago, as  (the "Co-Agents"), and
               Canadian Imperial  Bank of  Commerce ("CIBC"), as Agent for the
               Banks (the "Agent")

Ladies and Gentlemen:

1.   [Name  of  Transferor Bank] (the "Transferor") confirms  the accuracy  of
     the summary of its participation in the  Credit Agreement  set  out  in
     the schedule attached  hereto  (the "Schedule") before and after giving
     effect to the assignment and  transfer  herein made.  Transferor hereby
     assigns  and transfers,  without recourse, to [Name of Transferee  Bank]
     (the  "Transferee") the rights and obligations of Transferor under the
     Credit Agreement specified  in  the  Schedule. Transferee accepts  such
     assignment and transfer by countersigning  and delivering this Transfer
     Certificate  to Transferor.  This assignment is effective as of the date
     set forth in the Schedule (the "Transfer Effective Date").  The principal
     amount  of  any outstanding  Advances  under  the Credit Agreement as of
     the Transfer Effective Date shall  be apportioned between Transferor and
     Transferee in  accordance with  the  Schedule and Transferee shall pay
     Transferor  in immediately  available funds on the Transfer Effective  Date
     or  such  other date as is agreed to between the  Transferor and  the
     Transferee an amount equal to the principal  amount of  any  outstanding
     Advance being assigned and  transferred hereunder.  All interest and fees
     payable under the  Credit Agreement  shall  be  apportioned  between
     Transferor and Transferee proportionately to the periods before  and  after
     the Transfer Effective Date as to which payable.

2.   Transferee  is  also  delivering signed  counterpart  copies hereof  to
     the  Agent at its address  for  the  service  of notices  specified in the
     Credit Agreement.   The  Agent is requested to make appropriate entries on
     its  records  to reflect the assignment and transfer effected hereby.

3.   The  Transferee  hereby undertakes with the  Transferor  and each  of  the
     other parties to the Credit Agreement that  it will  perform  in
     accordance with  their  terms  all  those obligations  which by the terms
     of the Credit  Agreement  it will  assume  upon delivery of this Transfer
     Certificate  by it.  Transferee agrees promptly to deliver to the  Company,
     the  Agent and any other withholding agent specified by  the Company, two
     copies of a valid Form 1001, a valid Form  4224 or  a certificate
     substantially in the form of Exhibit I  to the  Credit Agreement (in
     accordance with Sections  8.2  and 14.7(e)   of  the  Credit  Agreement).
     Transferee   agrees promptly to pay to the Agent a transfer registration
     fee in the amount  of $2,500.  By its consent hereto  the  Company consents
     to  the transfer herein provided, agrees that Transferee  shall be a Bank
     under the Credit Agreement and releases  the Transferor pro tanto as to the
     obligations  of Transferor transferred to Transferee hereunder.

4.   The  Transferee confirms that it has received a copy of  the Credit
     Agreement together with such other documents and information  as it has
     required in connection with this transaction.  Transferee hereby confirms
     that it has entered into this assignment and transfer on the basis of its
     own independent commercial relationship with the Company and its own
     independent investigation and that it has not relied and will not hereafter
     rely on the Transferor, the other Banks, the  Agent, the Issuer or the Co-
     Agents with respect to the due execution, legality, validity,
     effectiveness, adequacy, accuracy  or enforceability of the Credit
     Agreement  or  any other documents and information or with  respect to the
     collectibility of any Advance or other amount due under the Credit
     Agreement.  Transferee further agrees that it has not relied and will not
     rely on the Transferor, the other Banks, the Agent, the Issuer or the Co-
     Agents to assess  or  keep under review on its behalf or provide
     Transferee, except as expressly required under the terms of the Credit
     Agreement, with   any information  as  to  the  financial  condition,
     creditworthiness, condition, affairs, status  or  nature  of the Company or
     the subsidiaries or of any other party to the Credit Agreement or the
     observance by the Company of any  of its  obligations under the Credit
     Agreement or any  document relating thereto.
     
<PAGE>
5.   The  Transferor  makes  no representation  or  warranty  and
     assumes  no  responsibility with respect  to  the  legality, validity,
     effectiveness, adequacy or enforceability  of  the Credit  Agreement or any
     document relating  thereto  or  the collectibility of any Advance or other
     amount due under  the Credit  Agreement  and  assumes no  responsibility
     for  the financial condition of the Company or any other party to the
     Credit  Agreement or for the performance and  observance  by the  Company
     or  any other party of any of its  obligations under  the Credit Agreement
     or any document relating thereto and  any  and  all  such conditions and
     warranties,  whether express or implied by law or otherwise, are hereby
     excluded.
6.   The Transferee confirms the appointment of the Agent and the
     Issuer  in  accordance with the terms of Article 13  of  the Credit
     Agreement.
     
7.   This Transfer Certificate shall be governed by and construed
              in accordance with the laws of the State of New York.
                                        
     IN  WITNESS  WHEREOF, the parties hereto  have  caused  this Transfer
Certificate to be duly executed and delivered as of  the date first above
written.
                                   [TRANSFEROR]
                                   By
                                   Name:
                                   Title:
                                           "Transferor" [TRANSFEREE]
                                   By
                                   Name:
                                   Title:
                                           "Transferee"



Consented to as of the above date by:

PACIFIC GAS TRANSMISSION COMPANY

By
Name:
Title:


<PAGE>

Receipt acknowledged and Consented to as of the above date:

CANADIAN IMPERIAL BANK OF COMMERCE, as
  Agent
By
Name:
Title:
<PAGE>

      THE SCHEDULE TO THE TRANSFER CERTIFICATE Details of Transfer

1.   Details of Commitments

            a.  Transferor's Commitment before this Transfer:
            b.  Amount of Commitment Transferred:
            c.  Transferor's remaining Commitment:
            d.  Transferee's Commitment:
            e.   Transfer Effective Date:

2.   Details of Advances

      a.  Outstanding Advance(s) and Letter of Credit Outstandings of Transferor
          to Company prior to Transfer Effective Date:

 Type of  Principal      Drawdown     Repayment         Interest
 Advance  Amount         Date            Date             Rate
--------  -------       -----------  --------------   -----------
      b.  Principal Amount of Outstanding Advance(s) and  Letter of Credit
          Outstandings Transferred to Transferee:


  
  Type of       Principal      Drawdown      Repayment     Interest
  Advance        Amount          Date          Date          Rate
 -----------   -------------  ---------     -----------   ------------
  
  
  <PAGE>
     Administrative Details Respecting Transferee
     Facility Office for Advances:
          Attn:
     Address for Notices:
          Attn:
     Account for Payments:
     Telephone:

     Telefacsimile:

     Telex:
<PAGE>
                          Issuance Request

Canadian Imperial Bank of Commerce as Agent and as Issuer
425 Lexington Avenue
New York, New York  10017

Attention:     [Name]
          [Title]
     Re:  PACIFIC GAS TRANSMISSION COMPANY

Gentlemen and Ladies:

     This  Issuance  Request  is delivered to you pursuant to Section 2.8 of
that certain Credit Agreement, dated as of May 31, 1995  (together with all
amendments, if any, from  time  to time made thereto, the "Credit  Agreement"),
among  Pacific Gas Transmission  Company, a California corporation (the
"Company"), certain  financial  institutions and Canadian  Imperial  Bank  of
Commerce, as agent the  "Agent").  Unless  otherwise defined herein or the
context otherwise requires, terms used herein  have the meanings provided in the
Credit Agreement.

     The Company hereby requests that the Issuer issue a  Letter of  Credit  for
the account of -------------- on [date]  in  the initial  face  amount of $-----
------- [and in  the  form  attached hereto].(1)

     The beneficiary of the requested Letter of Credit  will  be------------
, and such Letter of Credit will be in support of the  [provide description] and
will have a Stated Expiry Date  of [date].                     The following
documents will be required upon presentation: [provide description].


     The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on  the date of the proposed issuance of the
Letter of Credit, before and after giving effect thereto and to the application
of the proceeds therefrom:

     (i)   the face amount of the proposed Letter of Credit is not more than the
          Adjusted  Available Facility Amount;
          
     (ii)  no Default has occurred and is continuing;

     (iii)     the  representations and warranties contained  in Sections 10.1,
          10.4, 10.5, 10.6, 10.7 and 10.9 of the Credit Agreement are true and 
          correct as of the date of such issuance except for changes reflecting
          transactions permitted by the Credit Agreement;

     (iv)  no  authorizations, approvals or consents  of,  and  no filings  or
          renegotiations with, any  governmental  or regulatory  authority or
          agency are necessary  for  the incurring  of  obligations  in
          connection  with   such Advance,  other  than approvals which  have
          been  duly obtained and are of full force and effect; and
          
     (v)   the  incurring of obligations in connection  with  such Advance does
          not conflict with or result in a breach of any  applicable law or
          regulation, or any other,  writ, injunction or  decree  of  any  court
          or  regulatory authority.

  The Company agrees that if prior to the time of the issuance of  the Letter of
Credit requested hereby any matter certified to herein by it will not be true
and correct at such time as if then made,  it  will immediately so notify the
Agent.  Except  to  the extent,  if any, that prior to the time of the Letter
of  Credit requested  hereby the Agent shall receive written notice  to  the
contrary from the Company, each matter certified to herein  shall be  deemed
once again to be certified as true and correct at  the date of such Borrowing as
if then made.

     IN  WITNESS  WHEREOF, the Company has caused  this  Issuance Request  to be
executed and delivered, and the certification  and warranties  contained
herein, by its duly  Authorized  Signatory this ------ day of------------  , 19

                              PACIFIC GAS TRANSMISSION COMPANY
                                By:
                                Name:
                                Title:
[Issuance Request to be accompanied by such additional information/documentation
as is mutually acceptable to the Issuer and the Company, consistent with the
terms of the Credit Agreement]
-----------------------
[FN]
(1) Include where the Borrower is providing the form of Letter of Credit
requested to be issued.