Each Shipper responsible for transportation and/or treatment charges is required to participate in the sulfur bank. Each Shipper agrees to pay the Carrier the computed adjustments due from said Shipper in accordance with these rules and regulations.

Each shipper is required to participate in the sulfur bank. Each shipper agrees to pay Chevron Pipe Line Company the computed adjustments due from said Shipper in accordance with these rules and regulations.

I. Common Stream Calculation

• At the end of each month, the weighted average sulfur content (% by weight) of the sulfur bank will be determined for all crude petroleum received (receipt Bank) into the commingled common stream by dividing the total sulfur volume (% by weight x barrels) of all receipts by the total number of barrels received for the month.
• At the end of each month, the weighted average sulfur content (% by weight) of the sulfur bank will be determined for all crude petroleum delivered (Delivery Bank) from the commingled common stream by dividing the total sulfur volume (% by weight x barrels) of all deliveries by the total number of barrels delivered for the month.

II. Shipper Calculation

• At the end of each month, the weighted average sulfur content (% by weight) of all crude petroleum received from each Shipper will be determined by dividing the total sulfur volume (% by weight x barrels) from such Shipper by the total number of barrels received from such Shipper.
• At the end of each month, the weighted average sulfur content (% by weight) of all crude petroleum delivered to each Shipper will be determined by dividing the total sulfur volume (% by weight x barrels) delivered to such Shipper by the total number of barrels delivered to such Shipper.

III. Receipt Bank

• Shippers delivering crude petroleum to Carrier which has a sulfur content greater than the weighted average sulfur content of the common stream shall be charged a differential penalty. This penalty shall be the arithmetic product of the difference in the crude oil sulfur content (% by weight) of the shipment, less the weighted average sulfur content (% by weight) of the common stream times the volume of such shipment (barrels) times the basic sulfur content correction constant.
• Shippers delivering crude petroleum to Carrier which has a sulfur content less than the weighted average sulfur content of the common stream shall receive a differential credit. This credit shall be the arithmetic product of the difference in the weighted average sulfur content (% by weight) of the common stream less the crude petroleum sulfur content of the shipment (% by weight) times the volume of such shipment (barrels) times the basic sulfur content correction constant.
• The sum of credits and penalties for all Shippers is zero.
• Carrier will provide each Shipper at the end of each month a record of such Shipper's calculation and penalty or credit amount.

IV. Delivery Bank

• Shippers receiving crude petroleum from Carrier which has a sulfur content more than the weighted average sulfur content of the common stream shall receive a differential credit. This credit shall be the arithmetic product of the difference of the Net Crude Petroleum sulfur content (% by weight) delivered to such Shippers less the weighted average sulfur content (% by weight) of the common stream times the volume of such deliveries (barrels) times the basic sulfur content correction constant.
• Shippers receiving crude petroleum from Carrier which has a sulfur content less than the weighted average sulfur content of the common stream shall be charged a differential penalty. This penalty shall be the arithmetic product of the difference of the weighted average sulfur content of all crude petroleum (% by weight) delivered by Carrier in the month and the sulfur content of crude petroleum (% by weight) delivered to such Shippers during the month times the basic sulfur content correction constant.
• The sum of credits and penalties for all Shippers is zero.
• Carrier will provide each Shipper at the end of each month a record of such Shipper's calculation and penalty or credit amount.

V. Payment

At the end of each quarter, a statement shall be rendered to each Shipper setting forth the new penalty or credit balance of said Shipper's sulfur bank account and specifying the amount required to be paid (or received) to settle the account.

All payments due from Shippers shall be made within twenty (20) days of the statement date, and shall bear interest calculated at an annual rate equivalent to 125% of the prime or reference rate of interest as quoted by Bank of America, NT&SA, San Francisco, California, or such other bank as may be designated by Carrier, on ninety (90) day loans to substantial and responsible commercial borrowers or the maximum rate allowed by law, whichever is the lesser as the statement date for any delay in payment beyond such twenty (20) day period. All crude petroleum which is received from Shipper who has failed to pay such amounts shall be subject to the imposition of a lien to obtain payment of such amounts.

Payments to or from the Shippers as the result of administration of the Sulfur Bank Policy, are not part of the tariff rates of Carrier and said payments shall not be an offset or other claim by any Shipper against sums due Carrier for transportation and treatment or other charges collected pursuant to Carrier's tariff rules and regulations.

Chevron Pipe Line Company, 4800 Fournace Pl. Bellaire , TX 77401 Tel.: (713) 432-6000