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WEST AFRICAN GAS PIPELINE PROJECT

INTERNATIONAL PROJECT AGREEMENT

22 MAY 2003

THE REPUBLIC OF BENIN

THE REPUBLIC OF GHANA

THE FEDERAL REPUBLIC OF NIGERIA

THE REPUBLIC OF TOGO

WEST AFRICAN GAS PIPELINE COMPANY LIMITED


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CONTENTS

CLAUSE PAGE

1. DEFINED TERMS AND INTERPRETATION ............................................... 2

2. TERM AND EFFECTIVENESS.....................................................................22

3. EXCLUSIVITY ............................................................................................... 23

4. REPRESENTATIONS AND WARRANTIES................................................23

5. WEST AFRICAN GAS PIPELINE COMPANY LIMITED .......................... 24

6. LOCAL EQUITY PARTICIPATION IN THE COMPANY..........................26

7. AGREED REGIME.........................................................................................30

8. LEGISLATIVE PROCESS .............................................................................319. WAGP AUTHORITY .....................................................................................32

10. AUDITS BY WAGP AUTHORITY ...............................................................36

11. TRANSITIONAL ARRANGEMENTS ..........................................................39

12. WAGP REGULATIONS................................................................................. 39

13. INITIAL UNDERTAKINGS OF THE COMPANY.......................................40

14. COMMERCIAL AGREEMENTS...................................................................40

15. TARIFF METHODOLOGY IN GAS TRANSPORTATION

AGREEMENTS...............................................................................................41

16. LICENCES TO CONSTRUCT AND OPERATE PIPELINE SYSTEM .......43

17. OTHER PROJECT AUTHORISATIONS AND SUPPLEMENTALAUTHORISATIONS....................................................................................... 44

18. PIPELINE DEVELOPMENT PLAN ..............................................................46

19. ENVIRONMENT ............................................................................................ 48

20. PRE-DEVELOPMENT RIGHTS.................................................................... 51

21. LAND RIGHTS...............................................................................................52

22. CONSTRUCTION...........................................................................................54

23. OPERATION, MAINTENANCE AND REPAIR...........................................56

24. EXPANSION OF CAPACITY OF THE PIPELINE SYSTEM......................57

25. PIPELINE SYSTEM ENLARGEMENT ........................................................58

26. ACCESS CODE...............................................................................................59

27. INSURANCE...................................................................................................61

28. LOCAL PROCUREMENT AND EMPLOYMENT.......................................64

29. AGREED FISCAL REGIME .......................................................................... 66

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30. FOREIGN CURRENCY AND EXCHANGE CONTROLARRANGEMENTS......................................................................................... 69

31. ANTI-TRUST REGIME..................................................................................69

32. STATE SUPPORT...........................................................................................70

33. EMERGENCIES..............................................................................................72

34. FORCE MAJEURE .........................................................................................73

35. EXPROPRIATION..........................................................................................75

36. FAILURE OF AGREED REGIME................................................................. 75

37. COMPANY EVENT OF DEFAULT ..............................................................77

38. FAILURE TO ACHIEVE CRITICAL MILESTONES ..................................81

39. TERMINATION..............................................................................................82

40. COMPENSATION ON TERMINATION.......................................................8541. ABANDONMENT ..........................................................................................86

42. DISPUTE RESOLUTION...............................................................................87

43. WAIVER OF SOVEREIGN IMMUNITY......................................................93

44. GENERAL PAYMENT PROVISIONS..........................................................94

45. CONFIDENTIALITY......................................................................................94

46. BUSINESS ETHICS........................................................................................96

47. ASSIGNMENT................................................................................................96

48. NOTICES.........................................................................................................97

49. INFLATION INDEX..................................................................................... 100

50. LANGUAGE ................................................................................................. 100

51. APPLICABLE LAW .....................................................................................100

52. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 ....................... 100

53. REVIEW OF AGREEMENT ........................................................................100

54. AMENDMENT OF AGREEMENT..............................................................100

55. COSTS AND EXPENSES.............................................................................100SCHEDULE 1 PROJECT DEVELOPMENT MILESTONES ........................ 102

SCHEDULE 2 ENVIRONMENTAL SCHEDULE.........................................103

PART A: ENVIRONMENTAL IMPACT ASSESSMENT ...................................103

PART B: ENVIRONMENTAL MANAGEMENT PLAN....................................105

PART C: ENVIRONMENTAL REVIEW AND APPROVAL PROCESS ...............108

SCHEDULE 3 CONTENTS OF PIPELINE DEVELOPMENT PLAN ..........111

SCHEDULE 4 CONSTRUCTION COMMITMENT DATE .......................... 114

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SCHEDULE 5 COMMERCIAL AGREEMENTS...........................................116

SCHEDULE 6 WAGP REGULATIONS......................................................... 118

SCHEDULE 7 APPROVED TARIFF METHODOLOGY.............................. 120

SCHEDULE 8 AGREED FISCAL REGIME .................................................. 136

SCHEDULE 9 AGREED DESIGN STANDARDS.........................................166

SCHEDULE 10 ACCESS CODE PRINCIPLES............................................... 170

SCHEDULE 11 MAJOR CONTRACT BIDDING PROCEDURES.................175

SCHEDULE 12 ACCESS REFERENCE PRICE .............................................. 184

SCHEDULE 13 ECONOMIC CRITERIA.........................................................185

PART A: CONSTRUCTION ECONOMIC CRITERIA ......................................185

PART B: EXPANSION ECONOMIC CRITERIA.............................................186

PART C: RESTORATION ECONOMIC CRITERIA.........................................189

SCHEDULE 14 KEY TERMS OF FOUNDATION GASTRANSPORTATION AGREEMENTS..................................190

SCHEDULE 15 COMPANY VALUATION.....................................................192

SCHEDULE 16 ELIGIBLE DEVELOPMENT COSTS....................................194

SCHEDULE 17 APPROVAL OF PIPELINE DEVELOPMENT PLAN..........197

SCHEDULE 18 REQUIREMENTS FOR APPROVAL TO OPERATE ..........203

SCHEDULE 19 AUTHORISED EXPANSIONS.............................................. 204

SCHEDULE 20 EXCHANGE CONTROL REGIME .......................................206

SCHEDULE 21 ANTI-TRUST REGIME..........................................................208

SCHEDULE 22 LEGISLATIVE OUTLINE BENIN ...................................209

SCHEDULE 23 LEGISLATIVE OUTLINE GHANA.................................226

SCHEDULE 24 LEGISLATIVE OUTLINE NIGERIA...............................239

SCHEDULE 25 LEGISLATIVE OUTLINE TOGO ....................................249

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AN INTERNATIONAL PROJECT AGREEMENT made on May 22, 2003

BETWEEN:

(1) THE REPUBLIC OF BENIN (Benin);(2) THE REPUBLIC OF GHANA (Ghana);(3) THE FEDERAL REPUBLIC OF NIGERIA (Nigeria);(4) THE REPUBLIC OF TOGO (Togo);

(each a State and collectively the States)

ON THE ONE PART; and

(5) WEST AFRICAN GAS PIPELINE COMPANY LIMITED a companyincorporated under the laws of Bermuda and having its registered office atClarendon House, 2 Church Street, Hamilton HM 11, Bermuda (theCompany)

ON THE OTHER PART.

WHEREAS:

(A) On September 5, 1995, the States executed a Heads of Agreement for theSupply and Transmission of Natural Gas for the purpose of developing the WestAfrican Gas Pipeline project to construct a pipeline for the open access transportation

of Natural Gas from Nigeria and any other sources along the route of the pipeline, toconsumers in Benin, Togo and Ghana, and agreed to select a private developer to

build, own and operate the pipeline;

(B) At its meeting of May 6, 1999 in Lom, Togo, the Steering Committee set upunder Article 4.1 of the Heads of Agreement (the Steering Committee) authorised anddirected its representatives to negotiate this Agreement;

(C) On August 11, 1999, the States executed a Memorandum of Understandingwith Chevron Nigeria Limited, Ghana National Petroleum Corporation, Nigerian

National Petroleum Corporation, The Shell Petroleum Development Company of

Nigeria Limited, Societ Beninoise de Gaz S.A. and Societ Togolaise de Gaz S.A.under which it was agreed that a new company would be established by Chevron

Nigeria Limited, Ghana National Petroleum Corporation, Nigerian NationalPetroleum Corporation, The Shell Petroleum Development Company of NigeriaLimited, Societ Beninoise de Gaz S.A. and Societ Togolaise de Gaz S.A. or theirsuccessors to be the developer of the Project;

(D) In accordance with the Memorandum of Understanding the Company has beenestablished to be developer of the Project and to build, own and operate the PipelineSystem;

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(E) On February 4, 2000, the States executed an Intergovernmental Agreementunder which they agreed to establish a harmonised investment regime for the Project;

(F) The Parties have agreed that, for the establishment of the enablingenvironment necessary for the Project to be successful, the Agreed Regime should be

implemented and maintained;

(G) The States on January 31, 2003 entered into a treaty (the West African GasPipeline Treaty or the WAGP Treaty) pursuant to which they agreed, amongst otherthings, to implement and respect the terms of this Agreement, to establish the WAGPAuthority, the WAGP Tribunal and the Fiscal Review Board, and to foster a stableand harmonized legal environment in which the Project will operate;

NOW THEREFORE in consideration of the mutual covenants, conditions,representations and warranties set forth herein it is hereby agreed as follows:

1.

DEFINED TERMS AND INTERPRETATION

Defined Terms

1.1 The words and expressions defined below and appearing in this Agreement(including the Schedules hereto) shall except where the context otherwise requireshave the respective meanings given to them below:

Access Code has the meaning given in Clause 26.1, and includes any amendmentsthereto agreed in accordance with Clause 26.8;

Access Reference Price means a price for Natural Gas at the relevant time, stated as aprice per MMBtu of Natural Gas determined in accordance with Schedule 12;

Accounting Principles means the principles for accounting set out in Clause 5.3;

Adjusting Payment has the meaning given in paragraph B.45 ofSchedule 8;

Administrative Fees means any fees, charges or other imposts which are imposed orcharged for services, materials or rights provided or granted by any State or StateAuthority;

Affiliate means, with respect to a person, any other person (or two or more persons

acting together) that directly or indirectly through one or more intermediaries,controls, is controlled by or is under common control with that person, or who

possesses or possess, directly or indirectly, the power to direct or cause the directionof the management and policies of that person, whether through the ownership ofvoting securities, by contract, by law or otherwise;

Agreed Design Standards means those design standards set out in Schedule 9;

Agreed Fiscal Regimemeansthe fiscal regime set out in Schedule 8;

Agreed Regimehas the meaning given in Clause 7.1;

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Agreement means this agreement, including the schedules hereto;

Allowable Expenses has the meaning given in paragraph B.7 ofSchedule 8;

Allowable Loss has the meaning given in paragraph B.10 ofSchedule 8;

Anti-trust Regime means the regime governing anti-trust issues which is set out inSchedule 21;

Applicable Person means a WAGP Company or any other person (including ProjectContractors, Buyers, Sellers and Shippers) to whom the Agreed Fiscal Regime isintended to apply;

Applicable Rate means a rate of Interest equal to fifteen per cent (15%) per annum,compounding annually;

Apportionment Percentage has the meaning given in paragraph B.21 ofSchedule 8;

Approval to Operate means an approval given in accordance with Clause 16.5;

Approved Pipeline Development Plan means the Pipeline Development Plan which isapproved by the WAGP Authority in accordance with Clause 18.5, as it may beamended from time to time in accordance with Clause 18.6;

Approved Tariff Methodology means the methodology for setting tariffs fortransportation of Natural Gas in the Pipeline System which is set out in Schedule 7, orsuch other methodology for that purpose as may be agreed from time to time inaccordance with Clause 15.4;

Assessment has the meaning given in paragraph B.27 ofSchedule 8;

Assessment Due Date has the meaning given in paragraph B.28 ofSchedule 8;

Authorised Expansion means an expansion of the capacity of the Pipeline System beyond the Initial Development, but which does not involve an extension of thePipeline System, or the laying of additional pipe, beyond that contemplated in theApproved Pipeline Development Plan as originally agreed;

Authorised Expansion Approval Package means a package of information to be

provided by the Company in accordance with paragraphs 1 and 2 ofSchedule 19;

Benin means either the Republic of Benin or the territory of the Republic of Benin, asthe context may require;

British Thermal Unit or its abbreviationBtu means that amount of heat equal to onethousand and fifty-five decimal zero five six (1,055.056) joules as defined by theeleventh Conference Gnrale des Poids et Mesures at Paris, France in 1960;

Buyer means a purchaser from a Shipper of Natural Gas which has been transportedthrough the Pipeline System;

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Capital Account has the meaning given in paragraph B.11 ofSchedule 8;

Capital Allowances has the meaning given in paragraph B.14 ofSchedule 8;

Capital Asset has the meaning given in paragraph B.15 ofSchedule 8;

Capital Expenditure has the meaning given in paragraph B.15 ofSchedule 8;

Capital Service has the meaning given in paragraph B.15 ofSchedule 8;

Cash Flow Date means:

(a) in the case of expenditure or revenue arising in the Monthly AccountingPeriod, the last day of the month in which that expenditure or revenue arose;and

(b) in the case of expenditure or revenue arising in calendar years not within theMonthly Accounting Period, July 1 of the calendar year in which thatexpenditure or revenue arose.

Certification System means the certification system established in accordance withClause 29.14;

Claimed Reliefs has the meaning given in paragraph B.9 ofSchedule 8;

Combined Assessment has the meaning given in paragraph B.27 ofSchedule 8;

Commercial Agreements means the agreements listed in Schedule 5;

Commercial Operation Date means:

(a) the first day on which at least 70 MMscf of Natural Gas (other than NaturalGas which is being transported for the purpose of commissioning the PipelineSystem or a Shippers or a Buyers facilities) has been transported in thePipeline System pursuant to a Foundation Gas Transportation Agreement in a

period of 24 consecutive hours; or

(b) such other date as is agreed in writing by the Company and the WAGPAuthority to be the Commercial Operation Date;

Committee of Ministers means the committee of that name established under theWAGP Treaty;

Company Event of Default has the meaning given in Clause 37.2;

Company Force Majeure Event means any event or circumstance which isunforeseen and beyond the reasonable control of the Company and which prevents theCompany from performing its obligations under this Agreement, including, withoutlimitation:

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(a) acts of war or the public enemy (including blockades), civil war whether waris declared or not and invasion;

(b) public disorder, insurrection, rebellion, act of terrorism, sabotage or riots;(c)

landslides, lightning, floods, storms, tidal waves, perils to navigation,explosions, fires, earthquakes or other natural calamities and acts of God;

(d) strikes, lockouts, labour or other industrial action;(e) a Regime Failure or an Expropriation Event;(f) plague, epidemic or quarantine restrictions; and(g) any event or circumstance which delays the occurrence of the Completion

Date or renders it impracticable to achieve the Completion Date withoutmaterially increased expenditure;

PROVIDED THAT Company Force Majeure Event does not include:

(i) a lack of funds or the inability to use funds for any reason (save whereany of the foregoing is due to a Regime Failure) or events orcircumstances resulting therefrom; or

(ii) any wilful misconduct, negligence or non-compliance with laws orregulations by the Company (or any officer, servant or agent of theCompany), or events or circumstances resulting therefrom; or

(iii) the failure of Natural Gas to be supplied by Affiliates, other than incircumstances where such Affiliates are excused from liability for suchfailure under the applicable gas supply contract or events orcircumstances resulting therefrom;

Company Valuation means a valuation of the Company established in accordancewith Schedule 15;

Completion Date means the day immediately following the date upon whichconstruction of the Initial Development has been completed and all commissioningtests passed (including, if the Initial Development is constructed under a turn key

contract, the handing over of the Pipeline System to the Company under that contract)and the Pipeline System is capable of accepting Natural Gas at the InterconnectionPoint between the Pipeline System and ELPS and transporting such gas to thedelivery points agreed under the Foundation Gas Transportation Agreements;

Completion Deadline means the day which is 6 calendar months after the last day ofthe period stated in the Approved Pipeline Development Plan as the period followingthe Construction Commitment Date by which it is estimated that the Completion Datewill occur (as it may be extended in accordance with Clause 34.5);

Conceptual Design Package means the package of information to be provided by the

Company in accordance with paragraph 5 ofSchedule 17;

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Consolidated Group has the meaning given in paragraph B.33 ofSchedule 8;

Constitution means:

(a) in respect of Benin, the Constitution of Benin enacted in 1990;

(b) in respect of Ghana, the Constitution of Ghana adopted and enacted in 1992;

(c) in respect of Nigeria, the Constitution of Nigeria enacted in 1999; and

(d) in respect of Togo, the Constitution of Togo enacted in 1992;

Construction Commitment Date means the date immediately following the day onwhich each of the conditions set out in Schedule 4 shall have been satisfied or, to theextent not so satisfied, waived by the Company;

Construction Economic Criteria means the criteria set out in Part A ofSchedule 13,

or any alternative criteria agreed in writing by the Company and the WAGP Authorityto be the Construction Economic Criteria;

Construction Expenditure means the costs to be incurred by the Company on:

(a) constructing the Pipeline System, both onshore and offshore including alllateral pipelines, all compressor stations and regulating and metering stations;

(b) land acquisition (to the extent not included above);(c) construction management support;(d) external affairs activities;(e) environmental activities, including Environmental Impact Assessment follow-

up and Environmental Management Plan implementation;

(f) quality assurance and quality control;(g) insurance in relation to construction;(h) establishing offices in the States;(i) commercial and legal support activities in respect of the above; and(j) appropriate contingencies in respect of the above.Construction Period means any period commencing after the ConstructionCommitment Date during which Works are in progress;

Co-ordinating Environmental Protection Authority means:

(a) in respect of Benin, the Ministre de LEnvironment de LHabitat et DeLUrbanisme;

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(b) in respect of Ghana, the Ministry of Environment, Science and Technology;(c) in respect of Nigeria, the Federal Ministry of Environment; and(d) in respect of Togo, the Ministre De LEnvironment et des Ressources

Forestieres;

Debt means any actual obligation (whether present or future, secured or unsecured)for the payment or repayment of money (excluding contingent liabilities, amountsowing to trade creditors, and other liabilities incurred in the ordinary course of

business);

Definitional Phase Joint Venture Agreement means the joint venture agreementdated August 11, 1999 between Chevron Nigeria Limited, Ghana National PetroleumCorporation, Nigerian National Petroleum Corporation, The Shell PetroleumDevelopment Company of Nigeria Limited, Societ Beninoise de Gaz S.A. and

Societ Togolaise de Gaz S.A. (as amended or novated);

Discount Date means January 1 in the calendar year in which the Final InvestmentDecision is made;

Disposal Proceeds has the meaning given in paragraph B.17 ofSchedule 8;

Dispute Resolution Procedure means the procedure for the resolution of disputes setout in Clause 42;

Disputes Panelmeans a panel comprising five directors of the Company nominated by the Company, and the most senior permanent civil servant in the departmentresponsible for energy matters in the government of each State and the Director-General of the WAGP Authority;

Draft Legislation means, for each State, a draft bill for a law to be presented to theLegislature of that State for passage as Enabling Legislation, which the Company hasconfirmed in writing is acceptable as implementing the Agreed Regime;

ECOWAS means the Economic Community of West African States or its successorbody;

ECOWAS States means countries which are or which become signatories to the

ECOWAS Treaty;

ECOWAS Treaty means the Treaty of Cotonou (which replaced the Treaty of Lagoswhich established ECOWAS) or any revision of it;

Eligible Development Costs has the meaning given in Schedule 16;

Eligible Investment Entity has the meaning given in paragraph (a) of Clause 6.1;

ELPSmeans the Escravos-Lagos pipeline system;

Emergency Condition means any condition or situation that:

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(a) threatens the ability of the Company safely to receive, transport or deliverNatural Gas through the Pipeline System;;

(b) presents a danger to the environment; or(c)

endangers the safety of people within or working on the Pipeline System or presents a physical threat to property, plant or equipment or the security,integrity or reliability of the Pipeline System;

Emergency Response Plan means the plan to be developed by the Company inaccordance with Clause 33.1;

Enabling Legislation has the meaning given in Clause 8.1;

Environmental Impact Assessment has the meaning given in Clause 19.1;

Environmental Management Plan has the meaning given in Clause 19.2;

Equity means total assets, including retained earnings and other surplus reserves, lesstotal liabilities (including Debt), the resulting sum equal to the values ascribed tocommon stock, preferred stock, capital surplus or paid in capital and retained earningsor earned surplus, as disclosed in audited accounts;

Estimated Cost of the Initial Development has the meaning given in paragraph 4.4 ofSchedule 7;

Estimated Cost of the Final Development has the meaning given in paragraph 4.6 ofSchedule 7;

Exchange Control Regime means the regime governing foreign currency andexchange controls which is set out in Schedule 20;

Exclusive Possession Right means, in relation to land, a right to occupy that land tothe exclusion of any other person, but without prejudice to the constitutional rights ofthe State in which such land is situated;

Execution Date means the date upon which this agreement is executed by all of theParties;

Exempt Goods List means the list agreed by the Company and the WAGP Authorityin accordance with Clause 29.13, and includes any amendments to that list agreedfrom time to time;

Expansion Economic Criteria means the criteria set out in Part B ofSchedule 13, orany alternative criteria agreed in writing by the Company and the WAGP Authority to

be the Expansion Economic Criteria;

Expenses has the meaning given in sub-paragraph (b) of paragraph B.4 ofSchedule 8;

Expert means an expert appointed pursuant to Clause 42.2;

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ExpropriationEvent has the meaning given in Clause 35.1;

FID Dollars means US dollars having a purchasing power equivalent to US dollarson the Discount Date, and for the purpose of determining FID Dollars all expenditureor revenue is converted to FID Dollars as follows:

FID Dollars = ND x (I0 IY)

where:

ND = the number of nominal dollars of expenditure orrevenue;

I0 = in respect of expenditure or revenue arising during theMonthly Accounting Period, the Inflation Index as atthe last day of the penultimate month prior to the

Discount Date; and

in respect of expenditure or revenue arising in othercalendar years, the average of the Inflation Index forthe twelve calendar months up to and includingOctober 31 prior to the Discount Date; and

IY = in respect of expenditure or revenue arising during theMonthly Accounting Period, the Inflation Index as atthe last day of the penultimate month prior to themonth in which the expenditure or revenue arose; and

in respect of expenditure or revenue arising in othercalendar years, the average of the Inflation Index forthe twelve calendar months up to and includingOctober 31 prior to the calendar year in which theexpenditure or revenue arose;

Filing Date has the meaning given in paragraph B.26 ofSchedule 8;

Final Capitalmeans the sum of:

(a) the Eligible Development Costs;(b) the Estimated Cost of the Initial Development; and(c) the Estimated Cost of the Final Development;

Final Development means the Pipeline System as fully expanded in the mannercontemplated in the Approved Pipeline Development Plan;

Final Investment Decision means the decision taken by the Company to invest in andto implement the Project;

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Fiscal Review Boardmeans the Fiscal Review Board established in accordance withthe WAGP Treaty;

Fiscal Laws means laws in force in a State applying in respect of the Project andgoverning the fiscal topics addressed in the Agreed Fiscal Regime (including, to the

extent applicable, the Enabling Legislation);

Fiscal Start Date means the first day on which a Reservation Charge is payable undera Gas Transportation Agreement;

Fixed Penalty has the meaning given in paragraph F.2 ofSchedule 8;

Fixed VAT Penalty has the meaning given in paragraph F.13 ofSchedule 8;

Force Majeure Event means either a Company Force Majeure Event or a State ForceMajeure Event;

Foreign Currency means any freely convertible currency, including US dollars, thatis the lawful currency of a state (other than the currency of any of the States);

Foundation Gas Transportation Agreement means a Gas Transportation Agreemententered into by the Company which satisfies the following criteria:

(a) executed prior to the date of the Final Investment Decision;(b) for Reserved Capacity;(c) in respect of at least 10 MMscfd (or it calorific equivalent) of Natural Gas

through the Pipeline System; and

(d) for a term ending at least 20 years after the Completion Date,provided however that:

(e) a Gas Transportation Agreement which meets criteria (a) and (b) above butnot criteria (c) and/or (d) above will also be a Foundation Gas TransportationAgreement if agreed by the Company and the WAGP Authority to be aFoundation Gas Transportation Agreement; and

(f) Gas Transportation Agreements executed prior to the date of the FinalInvestment Decision in respect of deliveries of natural gas to the Volta RiverAuthority and Communaute Electrique du Benin will be Foundation GasTransportation Agreements in any event.

Foundation Reference Tariffhas the meaning given in Schedule 7;

Foundation Reservation Charge has the meaning given in Schedule 7;

Foundation Shipper means a Shipper which has entered into a Foundation GasTransportation Agreement with the Company;

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Front End Engineering Design Package means the package of information referredto in paragraph 1 ofSchedule 3;

Fuel Gas means all Natural Gas used for or consumed in the operation andmaintenance of the Pipeline System, including compressor station fuel and fuel used

for other utility purposes, together with line losses and other unaccounted-for lossesof Natural Gas incurred in such operations which are within tolerances permittedunder the Gas Transportation Agreements;

Fundamental Force Majeure Event has the meaning give in Clause 34.6;

Further Adjusting Payment has the meaning given in paragraph B.46 ofSchedule 8;

Further Penalty has the meaning given in paragraph F.4 ofSchedule 8;

Gas Transportation Agreement means an agreement between a person and the

Company for the transportation by the Company on behalf of that person of NaturalGas through the Pipeline System;

Ghana means either the Republic of Ghana or the territory of the Republic of Ghana,as the context may require;

Good Engineering Practice means the exercise of that degree of skill, diligence,prudence, foresight and operating practice which would reasonably and ordinarily beexpected from a skilled and experienced operator in accordance with internationallyacceptable industry standards and recognised good practice applicable to high

pressure Natural Gas pipelines;

ICSID Rules means the Rules of Procedure for Arbitration Proceedings of theInternational Centre for Settlement of Investment Disputes;

Income has the meaning given in paragraph B.4 ofSchedule 8;

Income Tax means amounts payable by a WAGP Company in accordance with PartB ofSchedule 8;

Income Tax Holiday Periodhas the meaning given in paragraph B.18 ofSchedule 8;

Industrial Development Reservation Charge has the meaning given in Schedule 7;

Inflation Forecast means an assumption that the Inflation Index will increase fromthe Discount Date at the rates set out in the then current forecast for US dollarconsumer price index inflation made in the Livingston Survey published by theFederal Reserve Bank of Philadelphia, and beyond the period of that forecast at aconstant rate of 3% per annum (and for which purpose it is assumed that in eachcalendar year during the Monthly Accounting Period that the rate of inflation is aconstant rate each month so that when compounded monthly during that period thetotal annual inflation equals the forecast annual rate);

Inflation Index means the monthly United States Consumer Price Index for All

Urban Consumers (U.S. All Items) as published by the United States Bureau of Labor

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Statistics from time to time, or any replacement index determined in accordance withClause 49;

Initial Capitalmeans the sum of:

(a)

the Eligible Development Costs; and

(b) the Estimated Cost of the Initial Development;Initial Development means the extent to which the Pipeline System will initially beconstructed by the Company to meet the initial market for Natural Gas, prior toexpansion to meet demand for additional capacity, as agreed in the Approved PipelineDevelopment Plan;

Initial Fiscal Term means the period commencing upon the Execution Date andending on the last day of the Primary Transportation Term or such later date as is

agreed in accordance with Clause 29.8;

Insurance Programme means the Companys programme of insurances of the typesspecified in Clauses 27.1 and 27.2;

Interest includes all other forms of return in respect of a Debt claim (other thanrepayment of the Debt), including, for the avoidance of doubt, discounts, fees andcharges;

International Accounting Standards means the accounting standards of that name aspromulgated by the International Accounting Standards Board;

Legislative Outlines means:

(a) in respect of Benin, the legislative outline set out in Schedule 22;(b) in respect of Ghana, the legislative outline set out in Schedule 23;(c) in respect of Nigeria, the legislative outline set out in Schedule 24; and(d) in respect of Togo, the legislative outline set out in Schedule 25.

Legislature means;

(a) in respect of Benin, the National Assembly of Benin;(b) in respect of Ghana, the Parliament of Ghana;(c) in respect of Nigeria, the National Assembly of Nigeria; and(d) in respect of Togo, the National Assembly of Togo;

Local Businesses means businesses owned or operated by persons who areincorporated or resident in one of the ECOWAS States;

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Local Investment Entity has the meaning given in paragraph (b) of Clause 6.1;

Long Stop Date means September 30, 2004, as it may be extended under Clause 34.5;

Major Company Event of Default has the meaning given in Clause 37.3;

Major Contract means a construction contract entered into by the Company for theconstruction of the Initial Development (not including contracts for professionalservices), which the Company anticipates will have a contract value exceeding US$5million;

Major Contract Bidding Procedures means the written procedure for awardingcontracts by competitive bidding set out in Schedule 11;

Maximum Capacity means the maximum capacity as set out in the Approved PipelineDevelopment Plan which is to be available in the Final Development for reservation

by Shippers as Reserved Capacity (excluding capacity required for Fuel Gas);

Mid Market Forecast means the forecast agreed in the Approved PipelineDevelopment Plan of the Reserved Capacity in each calendar year of the PrimaryTransportation Term, which has an equal probability of being higher and lower thanthe actual outcome;

Minor Taxes means Taxes other than Income Tax, VAT and customs duties;

MMBtu means million Btu;

MMscfdmeans million standard cubic feet per day;

MMscfmeans million standard cubic feet;

Monthly Accounting Periodmeans the period from and including the Discount Dateto and including December 31 in the calendar year in which the Completion Date isestimated in the Approved Pipeline Development Plan to occur;

Natural Gas means any hydrocarbons (or a mixture of hydrocarbons and other gases)which at a temperature of 60 degrees Fahrenheit and at atmospheric pressure are

predominantly in a gaseous state;

Negative Pool Balance has the meaning given in paragraph B.13 ofSchedule 8;

Nigeria means either the Federal Republic of Nigeria or the territory of the FederalRepublic of Nigeria, as the context may require;

Nigerian Commercial Group Members means Chevron Nigeria Limited, NigerianNational Petroleum Corporation and The Shell Petroleum Development Company ofNigeria Limited, or any of them, or their respective successors or assignees in respectof their interests in the Nigerian joint ventures between them for the production of oiland Natural Gas;

nominalmeans money of the day;

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Non-Allowable Expenses has the meaning given in paragraph B.8 ofSchedule 8;

Non-WAGP Regime means the legislation, regulations, principles of interpretationand application and any other features of the system of taxation applicable eithergenerally or specifically in any one or more of the States, as amended, modified or

enacted from time to time, which is not legislation introducing, amending, modifying,re-enacting or consolidating the Agreed Fiscal Regime;

Notice has the meaning given in paragraph F.16 or, as the case may be, paragraphF.17 ofSchedule 8;

Notice of Default has the meaning given in Clause 37.4;

Open Access Commencement Date means the first day of the calendar year:

(a) following the year in which the committed Reserved Capacity under GasTransportation Agreements remaining in force and being performed accordingto their terms, in respect of Natural Gas sourced from the NigerianCommercial Group Members or their Affiliates, first reaches 200 MMscfd; or

(b) which is 10 full calendar years after the Commercial Operation Date,whichever occurs first;

Operating Periodmeans the period beginning on the Commercial Operation Date andcontinuing for as long as Gas Transportation Agreements are in force;

Operator means an operator engaged by the Company in connection with the

operation of the Pipeline System in accordance with the provisions of Clause 23.2;

Parties means Benin, Ghana, Nigeria, Togo and the Company (and Party means anyof them);

Pipeline Development Plan means the development plan for the Pipeline System tobe prepared in accordance with Clause 15 and Schedule 17;

Pipeline Licences has the meaning given in Clause 16.1;

Pipeline System means a Natural Gas pipeline running from the Alagbado tee

junction in the ELPS near Lagos, Nigeria, through Benin and Togo, to a terminusinitially near Takoradi, Ghana, to be developed, built, operated and maintained by theCompany under the terms of this Agreement together with ancillary permanentfacilities which are needed for the construction and operation thereof (includingcompression stations, metering stations, valve stations, interconnection points andlaterals to Cotonou, Lom and Tema, pig launching and receiving stations andSCADA systems), and includes any extension or expansion;

Pipeline System Enlargement has the meaning given in Clause 25.1;

Primary Transportation Term has the meaning given in Clause 2.2;

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Project means the development of specifications, feasibility and market studies,design, financing, construction, ownership, operation and maintenance of the PipelineSystem;

Project Activities means activities undertaken within one or more of the States by a

WAGP Company, the Shareholders or the Project Contractors in connection with theimplementation of the Project;

Project Authorisations means all rights, permits, licences, consents, permissions,exemptions and approvals (including those identified in detail in the ApprovedPipeline Development Plan) which are needed by a WAGP Company or a ProjectContractor for the successful implementation of the Project, or to fulfil commitmentsmade under the Commercial Agreements or for the exercise of any of the rights of theCompany under this Agreement, and includes the Pipeline Licences;

Project Contractors means any contractors, sub-contractors, advisors or agents of the

Company engaged in connection with the implementation of the Project;

Project Periodmeans a period commencing on the Construction Commitment Dateand continuing for as long as Gas Transportation Agreements are in force;

Project Rights means all of the rights, entitlements and benefits conferred on theCompany by this Agreement, including the right of the Company to be issued theProject Authorisations and to implement the Project in accordance with the terms ofthis Agreement;

Real Foundation Tariffhas the meaning given in Schedule 7;

Real Industrial Development Tariffhas the meaning given in Schedule 7;

Real Rate of Returnmeans an annual rate of return calculated from cash flows thathave been converted to FID Dollars;

Real Tariffmeans Real Foundation Tariff, Real Standard Tariff and/or Real IndustrialDevelopment Tariff;

Real Standard Tariffhas the meaning given in Schedule 7;

Reference Tariffs means the Foundation Reference Tariff and the Standard Reference

Tariff;

Regime Failure has the meaning given in Clause 36.1;

Relevant Minister means the Minister of each State from time to time having powerto make regulations under the Enabling Legislation;

Reserved Capacity means transportation capacity in the Pipeline System which isreserved by Shippers under a Gas Transportation Agreement for transportation of

Natural Gas from a particular receipt point to a particular delivery point, on the basisof a firm commitment by the Company to transport such quantities of Natural Gas and

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a firm commitment by Shippers to pay the Reservation Charge for that transportationcapacity whether or not it is used;

Reservation Charge means Foundation Reservation Charge, Standard ReservationCharge and/or Industrial Development Reservation Charge;

Restoration Economic Criteria means the criteria set out in Part C ofSchedule 13, orany alternative criteria agreed in writing by the Company and the WAGP Authority to

be the Restoration Economic Criteria;

Returns has the meaning given in paragraph B.24 ofSchedule 8;

Right of Way means a strip of land or seabed or subsoil of a width specified in theApproved Pipeline Development Plan either side of the route specified in theApproved Pipeline Development Plan;

Rules of Procedure means the rules of procedure to be established by the RelevantMinisters in accordance with Article VI of the WAGP Treaty;

Securities means shares or Debt instruments;

Seller means a seller to a Shipper of Natural Gas which is to be transported throughall or part of the Pipeline System;

Shareholders means:

(a) the Affiliate of Chevron Nigeria Limited that holds shares in the Company;

(b) the Affiliate of The Shell Petroleum Development Company of NigeriaLimited that holds shares in the Company;

(c) Nigerian National Petroleum Corporation;

(d) the Affiliate of The Volta River Authority that holds shares in the Company;

and, if they exercise existing options to take up shares in the Company,

(e) Societ Bninoise de Gaz S.A. and

(f) Societ Togolaise de Gaz S.A.,

and their successors and assigns, each a Shareholder;

Shipper means a person who enters into a Gas Transportation Agreement with theCompany;

Standard Gas Transportation Agreement means a Gas Transportation Agreementother than a Foundation Gas Transportation Agreement;

Standard Reference Tariffhas the meaning given in Schedule 7;

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Standard Reservation Charge has the meaning given in Schedule 7;

Standard Shipper means a Shipper whose Gas is transported under a Standard GasTransportation Agreement;

State Authorities means, in relation to a State, the Government and each aspectthereof at every level, including central, regional and local authorities or bodies, andall non-judicial instrumentalities, statutory bodies, taxing authorities, branches andsubdivisions of any of the foregoing, and any entity which is directly or indirectlycontrolled by a State or one or more State Authorities; and includes the StateEnvironmental Protection Authorities, the Tax Authority and the TechnicalAuthorities of that State;

State Environmental Protection Authority means:

(a) in respect of Benin, the Ministre de LEnvironment de LHabitat et DeLUrbanisme;

(b) in respect of Ghana, the Environmental Protection Agency;(c) in respect of Nigeria:

(i) the Federal Ministry of the Environment;(ii) the environmental section of the Department of Petroleum Resources

of the Ministry of Petroleum Resources;

(iii) the Environmental Protection Agency for Lagos State;(iv) the Environmental Protection Agency for Ogun State;(v) the environmental section of the National Inland Waterways Authority;

and

(d) in respect of Togo:(i) the Ministre De LEnvironnement et des Ressources Forestieres; and

(ii) Programme Nationale dAction Environnementale;State Force Majeure Event means any event or circumstance which is unforeseenand beyond the reasonable control of all States and which prevents a State from

performing its obligations under this Agreement, but limited to:

(a) acts of war or the public enemy and civil war whether war is declared or not;(b) public disorder, insurrection, rebellion, sabotage, riots, demonstrations or

protestor activities;

(c) explosions, fires, earthquakes or other natural calamities and acts of God; and

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(d) strikes, lockouts, labour or other industrial action,PROVIDED THAT State Force Majeure Event does not include:

(i) a lack of funds or the inability to use funds for any reason, or events orcircumstances resulting therefrom;

(ii) any wilful misconduct, negligence or non-compliance with laws orregulations by a State, by any State Authority or by the WAGPAuthority (or any officer, servant or agent of such State, StateAuthority or WAGP Authority), or events or circumstances resultingtherefrom; or

(iii) a Regime Failure or events or circumstances resulting therefrom;State Liability has the meaning given in sub-paragraph (a) of paragraph B.2 of

Schedule 8;

States means Benin, Ghana, Nigeria and Togo, each a State;

Supplemental Authorisations means all rights, permits, licences, consents,permissions, exemptions and approvals which under the laws of a State are requiredby a Buyer, a Seller or a Shipper or any other person in connection with the sale orpurchase or transportation of Natural Gas which has been or is to be transported in thePipeline System or the transportation of Natural Gas in the Pipeline System;

Steering Committee means the Steering Committee referred to in Recital (B) above;

tariffmeans the charge made by the Company for transportation of Natural Gas in thepipeline system, comprising a Reservation Charge and a Usage Charge;

Tax, Taxation orTaxes means any existing or future taxes, levies, duties, customs,imposts, contributions (such as social fund and compulsory medical insurancecontributions), fees, assessments or other similar charges payable to or imposed by aState or a State Authority, does not include reasonable Administrative Fees, but doesinclude Administrative Fees to the extent that they exceed a reasonable amount for theservices, materials or rights provided or granted;

Tax Authority means:

(a) in respect of Benin, the Direction Generale des Impots;(b) in respect of Ghana:

(i) in respect of value added tax, the Value Added Tax Service;(ii) in respect of customs and excise duties, the Customs, Excise and

Preventive Service; or

(iii) in respect of Income Tax or any other Tax matter, the Internal RevenueService;

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(c) in respect of Nigeria:(i) in respect of Income Tax and value added tax, the Federal Internal

Revenue Service; and

(ii)

in respect of customs and excise duties, the Board of Customs andExcise; and

(d) in respect of Togo, the Direction Generale des Impots,or in each case their successor bodies;

Tax Year means a period of one year beginning on January 1 and ending onDecember 31;

Tax-related Penalty has the meaning given in paragraph F.7 or, as the case may be,F.8 ofSchedule 8;

Taxable Income has the meaning given in paragraph B.3 ofSchedule 8;

Technical Authority means:

(a) in respect of Benin, the Ministre de lEnergie;(b) in respect of Ghana, the Ministry of Energy;(c) in respect of Nigeria, the Ministry of Petroleum Resources; and(d) in respect of Togo, the Ministre de lEnergie;Technical Dispute means any dispute or difference arising out of or in connectionwith the Pipeline Development Plan, the Approved Pipeline Development Plan, theEnvironmental Impact Assessment or the Environmental Management Plan, togetherwith any other disputes which the Parties to the dispute agree are of a technicalnature, but does not include:

(a) any dispute as to whether a Company Event of Default is a Major CompanyEvent of Default; or

(b)

any dispute concerning the interpretation of this Agreement.

Togo means either the Republic of Togo or the territory of the Republic of Togo, asthe context may require;

UNCITRAL Arbitration Rules means the Rules of Arbitration of the United NationsCommission on International Trade Law;

United Kingdom Anti-Bribery Legislation means together the Public Bodies CorruptPractices Act 1889, the Prevention of Corruption Act 1906, the Prevention ofCorruption Act 1916 and Part 12 of the Anti-Terrorism, Crime and Security Act 2001;

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US dollars orUS$ means the lawful currency of the United States of America;

Usage Charge has the meaning given in Schedule 7;

VAThas the meaning given in paragraph C.1 ofSchedule 8;

VAT Consolidation has the meaning given in paragraph C.11 ofSchedule 8;

WAGP Activities means any activities of the Company or any subsidiary of theCompany which:

(a) are engaged in by the Company or its subsidiary in relation to the PipelineSystem business or for the purpose of furthering the West African GasPipeline System business; or

(b) are agreed by the Company and the WAGP Authority to be a WAGP Activity,but shall not include:

(c) the operation of local distribution companies; or(d) any other activity agreed by the Company and the WAGP Authority not to be

a WAGP Activity.

WAGP Authority means the West African Gas Pipeline Authorityestablished underthe WAGP Treaty;

WAGP Authority Charge has the meaning given in paragraph (d) of Clause 9.4;

WAGP Company means the Company and any wholly owned subsidiary corporationof the Company which is the subject of a notification to the WAGP Authority and theTax Authorities in accordance with Clause 29.3;

WAGP Income has the meaning given in paragraphs B.5 and B.6 ofSchedule 8;

WAGP Regulations means regulations governing the construction and operation ofthe Pipeline System, to be made or adopted by the Relevant Minister of each Stateunder the Enabling Legislation;

WAGP Treaty has the meaning given in Recital (G) above;

WAGP Tribunalmeans the tribunal of that name established by the WAGP Treaty;

WAGP/ELPS Interconnection Point means the point at which the Pipeline Systemjoins ELPS;

Weighted Average Tariffhas the meaning given in Clause 18.3;

Works means the works relating to the design, construction, installation, completion,testing and commissioning of the Pipeline System (including any expansion thereof);and

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Written Down Value has the meaning given in paragraph B.16 ofSchedule 8.

Interpretation

1.2 The following rules shall apply to the interpretation of this Agreement unlessthe context otherwise requires:

(a) references to Clauses or Schedules are to the Clauses of, and to theSchedules to, this Agreement unless otherwise stated. Headings to clauses,

paragraphs, chapters, schedules and other provisions of this Agreement areinserted for ease of reference only and shall not affect the interpretation of thisAgreement. The Schedules to this Agreement are an integral part hereof;

(b) any reference to a person or persons includes reference to any individual,corporation, partnership, joint venture, association, public body, governmentalauthority or other entity. Where the context requires, words in the singular

shall also include the plural and vice versa;

(c) any reference to this Agreement or to any other agreement or documentincludes a reference to this Agreement, or, as the case may be, such otheragreement or document as amended from time to time;

(d) references to days shall be references to calendar days; provided that if anobligation falls due on a day which is a national holiday in the State where theobligation is to be performed then the obligation shall fall due on the next dayon which government offices are open for business in that State;

(e) references to expenditure being necessarily incurred shall mean expenditurewhich a competent pipeline operator applying industry best practice wouldconsider was required, to fulfil the obligations of the Company under theProject Authorisations, the Approved Pipeline Development Plan or thisAgreement in the most efficient manner;

(f) if and to the extent that any provision of this Agreement is held to be illegal,void or unenforceable, such provision shall be given no effect and shall bedeemed not to be included in this Agreement, as the case may be, but withoutinvalidating any of the remaining provisions of this Agreement;

(g) no failure or delay by any Party in exercising any right or remedy provided bylaw under or pursuant to this Agreement shall impair such right or remedy oroperate or be construed as a waiver or variation of it or preclude its exercise atany subsequent time and no single or partial exercise of any such right orremedy shall preclude any other or further exercise of it or the exercise of anyother right or remedy;

(h) this Agreement, including the Schedules, constitutes the entire agreement andunderstanding between the Parties in respect of the subject matter hereof, andsupersedes:

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(i) any and all previous agreements and arrangements between the Partiesin respect thereof, and

(ii) the Memorandum of Understanding referred to in Recital (C);(i)

any reference to any common or customary law and any constitution, decree, judgment, legislation, order, ordinance, rule, regulation, statute, convention,treaty or other legislative measure in any jurisdiction and any present or futuredirective, regulation, guideline, practice, concession, request or requirementwhether or not having the force of law is a references to it as amended or re-enacted; and

(j) the words includes and including shall be construed without limitation.Consequence of unenforceability

1.3

If any provision of this Agreement is held to be illegal, void or unenforceable,the Parties shall meet to negotiate in good faith to agree a valid, binding andenforceable substitute provision or provisions, (if necessary with reconsideration ofother terms of this Agreement not so affected) so as to maintain the commercialinterests of the Parties set out in this Agreement as executed.

2. TERM AND EFFECTIVENESSTerm

2.1 Unless terminated earlier in accordance with Clauses 38 or39, this Agreementshall continue until the end of the Primary Transportation Term, and thereafter for the

period of any extensions in accordance with Clause 2.3below.

2.2 In this Agreement, Primary Transportation Term means the periodcommencing upon the Completion Date and ending on the date of the later to occur ofthe following events:

(a) the 20th anniversary of the Commercial Operation Date; and(b) the last date on which a Foundation Gas Transportation Agreement terminates

(excluding any extensions thereto).

2.3 Provided the Company is not, at the time that this Agreement would otherwiseterminate under Clause 2.1 above, in material breach of its obligations under thePipeline Licences, this Agreement shall be extended for as long as a Pipeline Licenceremains in force.

Effectiveness

2.4 Subject to Clauses 2.5 and Clause 2.6, the provisions of this Agreement shallcome in to force and be binding upon the Parties with effect from the date of thisAgreement.

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2.5 The provisions of Clauses 6, 22, 23, 24, 25, 27 and 28.5 of this Agreementshall only come in to force and be binding upon the Company following theoccurrence of the Construction Commitment Date.

2.6 The provisions of Clauses 36 and 40.3 of this Agreement shall only come in toforce and be binding upon the States following the Company:

(a) providing the WAGP Authority with a summary of the key terms andconditions of all Foundation Gas Transportation Agreements, including thekey terms listed in Schedule 14; and

(b) taking all necessary steps for it to establish in each State the legal presencedescribed in paragraphs (a), (b), (c) and (d) of Clause 5.1.

3. EXCLUSIVITYNo State shall, prior to December 2, 2003, enter into negotiations with, or issue anyconsents, permits, licences, approvals or similar authorisations to, any other person inrelation to the establishment of a cross-border pipeline or pipelines for thetransmission of Natural Gas where the delivery of Natural Gas from such a pipelinewould be capable of competing with the delivery of Natural Gas shipped through thePipeline System.

4. REPRESENTATIONS AND WARRANTIESThe Company

4.1 The Company hereby represents and warrants as follows:(a) that it is a company duly incorporated and validly existing under the laws of

Bermuda;

(b) that it has the requisite power and authority to enter into and perform thisAgreement and all such actions have been duly authorised by all necessary

procedures on its part;

(c) that this Agreement will constitute its valid and binding obligations inaccordance with its terms; and

(d) that the execution, delivery and performance of this Agreement will not:(i) result in a breach of any provision of its bye-laws;

(ii) result in a breach of, or constitute a default under, any instrument towhich it is a party or by which it is bound; or

(iii) result in a breach of any order, judgement or regulation by which it isbound.

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The States

4.2 Each of the States hereby represents and warrants as follows:(a) that it is duly authorised and empowered under its Constitution to enter into

this Agreement and the WAGP Treaty;

(b) that the commitments made in this Agreement and in the WAGP Treatyconstitute its legal valid and binding obligations, enforceable in accordancewith their terms;

(c) that it is not a party to or lawfully bound to observe or enforce anyinternational agreement or similar or other commitment that conflicts with,impairs or interferes with, or adversely affects such States performance of itsobligations under, the WAGP Treaty, this Agreement or the implementation ofthe Project; and

(d) that the Project Rights are valid in accordance with its applicable laws andneither it nor its State Authorities have issued (nor are any of them obliged toissue) to any person any rights or privileges that are inconsistent with orconflict with or would limit or interfere with the exercise and enjoyment of theProject Rights.

5. WEST AFRICAN GAS PIPELINE COMPANY LIMITEDRegistration as a foreign company

5.1 Before or as soon as practicable after the occurrence of the ConstructionCommitment Date, the Company shall establish in each State the following legal

presence and each State shall fulfil the following requirements for the establishmentof such legal presence:

(a) In respect of Benin, the Company shall register as an unincorporated branch ofa foreign corporation. Benin shall cause its Ministry of Commerce to deliverto the Company by not later than the Construction Commitment Date anunconditional exemption from the requirements of Art. 120 of the UniformAct on Company Law by way of an arrt. Such exemption shall be inforce for as long as the Company holds a Pipeline Licence.

(b) In respect of Ghana, the Company shall register as an external companypursuant to Section 303 of the Companies Code, and shall comply with such provisions of the Companies Code as are applicable to external companies(including, without limitation, Sections 302-316 relating to service of process,the filing of accounts and related information, the registration of charges overan external companys local assets and other corporate informationalrequirements). The Company shall be entitled to so register for as long as theCompany holds a Pipeline Licence.

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(c) In respect of Nigeria, the Company shall provide to the Registrar theinformation required under the Enabling Legislation to establish itsregistration in Nigeria as a foreign corporation.

(d) In respect of Togo, the Company shall register as an unincorporated branch ofa foreign corporation. Togo shall cause its Ministry of Commerce to deliverto the Company by not later than the Construction Commitment Date anunconditional exemption from the requirements of Art. 120 of the UniformAct on Company Law by way of an arrt. Such exemption shall remain inforce for as long as the Company holds a Pipeline Licence.

Corporate reorganisation consent

5.2 The Company shall not reorganise its legal corporate structure without the prior written consent of the WAGP Authority, which consent shall not beunreasonably withheld, delayed or conditioned.

Accounting Principles

5.3 The accounts of the Company shall be prepared in accordance withInternational Accounting Standards, on an accrual (as opposed to cash) basis unlessotherwise specifically provided in this Agreement, with revenues attributed to theaccounting period in which they are earned, and costs and expenses to the accounting

period in which they are incurred without the need to consider when the amount isreceived or disbursed in connection with a particular transaction, and costs andexpenses deemed to have been incurred, in the case of physical items, in theaccounting period when title passes, and in the case of services, in the accounting

period when such services are performed.

Denomination of accounts and financial reports

5.4 The Company and any of its branches, places of business, subsidiaries orunregistered foreign offices within any of the States shall be entitled to maintain theirstatutory accounts denominated in US dollars and shall not be required to prepare

branch accounts in any of the States. All financial reports to be prepared andsubmitted by the Company or any of its branches, places of business, subsidiaries orunregistered foreign companies shall be prepared in US dollars in accordance with theAccounting Principles.

Restriction on share transfers

5.5 The Company shall procure that the Shareholders will not, without the priorwritten consent of the WAGP Authority, which consent shall not be unreasonablywithheld, delayed or conditioned:

(a) transfer shares in the Company; or(b) enter into agreements which allow other parties to exercise control over the

Company.

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5.6 Clause 5.5 shall not apply to any transfer or agreement to allow other partiesto exercise control over the Company:

(a) by a Shareholder to an Affiliate of such Shareholder; or(b)

between Shareholders or their Affiliates; or

(c) entered into by way of provision of security to any bank, financial institutionor other provider of finance or other person who is a creditor or potentialcreditor of the Company (or any trustee, agent or other person acting on their

behalf) as security for any financing or other credit provided to the Companyor obligations owed by the Company in respect of the Project; or

(d) made pursuant to the exercise of rights under any security provided to secureobligations under a Commercial Agreement; or

(e)

occurring after the date which is the earliest to occur of:

(i) the date on which the Company becomes a public company; or(ii) the date on which the rights set out in Clause 6 are exercised; and

(iii) the date which is 10 years after the Completion Date.6. LOCAL EQUITY PARTICIPATION IN THE COMPANYLocal Investment Entity

6.1 In this Agreement:(a) Eligible Investment Entity means an entity:

(i) which is duly established and validly existing under the laws of itscountry of incorporation with the capacity to enter into and perform thetransactions provided for hereunder;

(ii) which is structured so as to hold an equity investment in the Companysolely for the benefit of all of the citizens of the States or a group ofcitizens of the States in which all citizens of the States have the right to

participate;

(iii) which is or will be adequately funded to enable it to assume theresponsibilities and liabilities referred to below; and

(iv) the structuring or ownership of which will not cause or be likely tocause the Company or any of its Shareholders or their Affiliates to bein breach of, or subject to any penalty or sanction under, the ForeignCorrupt Practices Act of the United States of America or the UnitedKingdom Anti-Bribery Legislation or the OECD Convention onCombating Bribery of Foreign Public Officials in International

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Business Transactions (or similar legislation in any applicablejurisdiction) or the Iran-Libya Sanctions Act; and

(b) Local Investment Entity means an Eligible Investment Entity nominated inaccordance with Clause 6.2.

6.2 On a single occasion during the period beginning on the date falling 24months and ending on the date falling 60 months after the Commercial OperationDate, the States may, by a notice signed by the Relevant Minister of each of the Statesand delivered to the Company, nominate a single Eligible Investment Entity to be theLocal Investment Entity and request the Company to prepare a Company Valuation inaccordance with this Clause 6 and Schedule 15.

6.3 A notice given under Clause 6.2 shall be accompanied by:(a) a statement advising the full corporate details of the Local Investment Entity,

including its corporate nature and place of location, and its equity owners,directors and management;

(b) a copy of its memorandum of association and by-laws, or equivalent;(c) details of the category or categories of local citizens who will benefit from the

interest in the Company through the Local Investment Entity and the nature ofthat benefit, including a copy of any instruments which establish or willestablish the benefit; and

(d) details of the proposed funding of the Local Investment Entity for theacquisition of an interest in the Company as provided in this Clause 6,including the source of that funding, the terms of the funding and evidence ofthe adequacy and availability of such funding,

and shall constitute a warranty that the nominated entity is an Eligible InvestmentEntity.

Company Valuation

6.4 Upon receipt of a notice given under Clause 6.2, the Company shall procure aCompany Valuation and notify the Relevant Ministers thereof in accordance withSchedule 15.

Information

6.5 The Company shall, at the same time that it notifies the Relevant Ministers ofthe Company Valuation, provide to the Relevant Ministers and the WAGP Authority:

(a) a statement specifying whether the interest to be acquired by the LocalInvestment Entity will be a transfer of Securities of the Company fromexisting Shareholders or their Affiliates, or the allotment of new Securities bythe Company; and

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(b) a copy of all agreements (including the shareholders agreement of theCompany) then in force to which the Local Investment Entity would berequired to become a party following its acquisition of an interest in theCompany.

Election to acquire

6.6 Within 28 days of the notification referred to in Clause 6.5, the LocalInvestment Entity may elect by notice in writing to the Company to acquire up to a25% interest in the share capital of the Company, and the same proportion of anyDebt owed by the Company to Shareholders or their Affiliates (as specified in thisClause). An election made under this Clause shall stipulate the percentage interest to

be acquired and shall constitute a binding commitment by the Local Investment Entityto:

(a) acquire the interest in the share capital and the Debt of the Company in thesame form and on the same terms as then held by the Shareholders or theirAffiliates;

(b) accept from the Shareholders and/or their Affiliates, or from the Company, asthe case may be, an assignment and transfer or allotment of the Securities to

be acquired;

(c) enter into an accession agreement to the shareholders agreement of theCompany as then in force;

(d) in accordance with such shareholders agreement, enter into a deed ofadherence in respect of any other agreements then in force between theShareholders or their Affiliates which have been notified under Clause 6.5 asagreements to which the Local Investment Entity is required to become a

party; and

(e) accept liability for a proportionate share of the obligations then borne by theShareholders or their Affiliates in relation to the Company or its finances.

If the Local Investment Entity fails to make such an election within the periodspecified above, the option under this Clause shall lapse.

Price payable for interest

6.7 The price for the interest to be acquired by the Local Investment Entity shallbe payable immediately upon execution of the instruments referred to in Clause 6.6 inimmediately available money at the direction of the Shareholders and/or theirAffiliates, or the Company, as the case may be, and shall be:

(a) if the Company advised under paragraph (a) of Clause 6.5 that the interestwould be acquired through a transfer from existing Shareholders or theirAffiliates, one hundredth of the Company Valuation advised by the Companyunder Clause 6.5 per percentage point of the interest which the LocalInvestment Entity elects under Clause 6.6 to acquire; or

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(b) if the Company advised under paragraph (a) of Clause 6.5 that the interestwould be acquired through the allotment of new Securities by the Company,an amount derived from the following formula:

P = V ( I / ( 100 I ) )

where: P is the price to be paid;

V is the Company Valuation notified by the Company inaccordance with Clause 6.5; and

I is the number of percentage points notified by the LocalInvestment Entity under Clause 6.6 as the percentage interest inthe Company it would acquire.

The States shall procure payment by the Local Investment Entity of the price payable

pursuant to this Clause.

Securities to be acquired

6.8 If the Company advised pursuant to paragraph (a) of Clause 6.5 that theinterest would be acquired through a transfer of Securities from existing Shareholdersor their Affiliates, then:

(a) the Company shall procure the transfer from the Shareholders or theirAffiliates (as the case may be) to the Local Investment Entity, upon receipt of

payment by the Local Investment Entity; and

(b) the States shall procure the acceptance by the Local Investment Entity of thattransfer,

of the percentage elected and notified by the Local Investment Entity under Clause6.6 of the interest then held by each Shareholder or its Affiliate in the Securitiescomprising the share capital of the Company and the Debt owed by the Company toeach Shareholder or its Affiliates.

6.9 If the Company advised pursuant to paragraph (a) of Clause 6.5 that theinterest would be acquired through the allotment of new Securities by the Company,then:

(a) the Company shall allot to the Local Investment Entity, upon receipt ofpayment by the Local Investment Entity; and

(b) the States shall procure the acceptance by the Local Investment Entity of thatallotment of,

Securities equivalent to those then held by the Shareholders or their Affiliates in theshare capital of the Company and in the Debt of the Company, which after allotmentwould be equal to the percentage of such Securities elected and notified by the LocalInvestment Entity under Clause 6.6.

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Restrictions on transfer

6.10 The Local Investment Entity shall not, without the prior written consent of theCompany, which consent shall not be unreasonably withheld, delayed or conditioned,

be permitted to transfer all or any of the Securities acquired pursuant to Clause 6.6.

No transfers of any such Securities shall be permitted other than to a single entity.

Costs and expenses

6.11 All costs and expenses of the Local Investment Entity will be borne by theStates.

Change to Local Investment Entity

6.12 The States shall procure that, following the acquisition by the LocalInvestment Entity of an interest in the Company pursuant to this Clause 6, the Local

Investment Entity continues, for as long as it holds that interest in the Company, to bestructured solely for the benefit of citizens of the States generally.

7. AGREED REGIMEDefinition of Agreed Regime

7.1 In this Agreement, the expression Agreed Regime means the regimecomprising each of the following elements:

(a) the WAGP Treaty as originally executed between the States;(b) laws enacted and in force in each State at the Execution Date enabling the

Project to be implemented in accordance with this Agreement, together withnew laws enacted and in force in each State giving legislative effect to the

principles set out in the Legislative Outline for each such State (except to theextent that Clause 29.7provides that the Agreed Fiscal Regime is not requiredto be maintained);

(c) the Company being permitted to register in accordance with Clause 5.1, and being granted the exemptions provided for in Clause 5.1, and all suchexemptions being maintained in accordance with Clause 5.1;

(d) laws enacted and in force giving legislative effect to, or administrative actionsimplementing, the Anti-trust Regime and the Exchange Control Regime ineach State, and the Anti-trust Regime and the Exchange Control Regime beingmaintained in each State;

(e) the WAGP Regulations (as initially adopted under the Enabling Legislation,and in respect of which the Company gives notice that it accepts the contentthereof as set out in paragraph (g) ofSchedule 4) made or adopted and in forcein each State;

(f) the Rules of Procedure (as initially adopted in accordance with the WAGPTreaty, and in respect of which the Company gives notice that it accepts the

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content thereof as set out in paragraph (o) of Schedule 4) being establishedand maintained in accordance with the WAGP Treaty;

(g) all of the rights and entitlements provided for in this Agreement, including theProject Authorisations, and in the WAGP Treaty, having been validly granted

and continuing to be valid; and

(h) performance by the States of their material commitments under thisAgreement.

Implementation of Agreed Regime

7.2 Each State shall, to the extent applicable in that State, use its best endeavoursto implement and maintain the Agreed Regime.

8. LEGISLATIVE PROCESSRequirement for legislation

8.1 As part of the establishment of the Agreed Regime, each State shall use itsbest endeavours to procure that laws are passed by its Legislature and brought in toforce in that State giving legislative effect to the principles set out in the LegislativeOutline applicable to the State (Enabling Legislation).

Parliamentary process

8.2 Each State shall, as soon as practicable following the Execution Date:(a) if and to the extent required by the laws of such State, take such steps and

complete all such formalities as are necessary to present, and present, theWAGP Treaty to its Legislature for ratification;

(b) take such steps and complete all such formalities as are necessary to present,and present, the Draft Legislation applicable to that State to its Legislature forenactment as a law of that State; and

(c) use its best endeavours to facilitate the prompt passage of the DraftLegislation through its Legislature.

Harmonisation of laws

8.3 Each State shall use its best endeavours to ensure that the provisions of theEnabling Legislation in force within its jurisdiction are at all times in all materialrespects consistent with the equivalent provisions in the Enabling Legislation in forcein the other States, and that its Enabling Legislation is not amended unless:

(a) all of the States make the same changes having effect at the same time; and(b) the Company gives its prior written consent to changes to the provisions in the

Enabling Legislation concerning the authority and power of the WAGP

Authority and the WAGP Regulations.

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Amendment to Enabling Legislation

8.4 If any State or the WAGP Authority considers it necessary or appropriate toamend or supplement the Enabling Legislation, it shall notify each of the Parties (and,if a State is making such notification, the WAGP Authority) of the change it proposes.

The States shall consult with the Company on the proposed changes and afford theCompany the opportunity to comment thereon and/or submit alternative amendmentsor supplements to the Enabling Legislation. The States shall not without the priorwritten approval of the Company agree to or propose changes to the EnablingLegislation which would have the effect of creating a different set of laws on the sametopic applying in one or more States or which are materially inconsistent with the

provisions of this Agreement.

9. WAGPAUTHORITYFunctions of the WAGP Authority

9.1 The functions of the WAGP Authority shall be as set out in the WAGP Treatyas originally executed by the States on January 31, 2003.

Empowering the WAGP Authority

9.2 Each State shall take all necessary steps to ensure that the WAGP Authority isgranted or delegated full authority to perform, in each such State, its functions as setout in the WAGP Treaty.

Means of the WAGP Authority

9.3 The States shall ensure that the staffing levels and other costs incurred by theWAGP Authority, and the funding requirements notified by the WAGP Authorityunder Clause 9.4, are reasonable having regard to the functions of the WAGPAuthority as described in the WAGP Treaty, and that the WAGP Authority at alltimes has sufficient funding to perform its functions.

Funding of the WAGP Authority

9.4 The Company will contribute to the funding of the WAGP Authority in thefollowing manner:

(a) During the period from the formation of the WAGP Authority (or such earlierdate as may be agreed by the Parties) until the Construction CommitmentDate, the Company shall pay to the WAGP Authority, in quarterly paymentsin advance, a funding contribution for that period at a rate of US$300,000 peryear.

(b) For each calendar year or part thereof from the Construction CommitmentDate up until the Commercial Operation Date, the WAGP Authority willadvise the Company in writing of its funding requirement (in US dollars) forits activities as described in this Agreement and the WAGP Treaty. Thisfunding requirement may include the cost of hiring of consultants or other

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services reasonably required for the WAGP Authority for the activitiesdescribed in this Agreement or the WAGP Treaty which are to be performedduring that period. The funding requirement notified by the WAGP Authorityin accordance with this paragraph shall be a reasonable amount for thecarrying out of the activities to which the funding relates, and shall include a

detailed breakdown of the anticipated expenditure of the WAGP Authority.The Company shall provide a copy of that detailed breakdown to all Shippers.The Company will pay to the WAGP Authority the amount of the notifiedfunding requirement, in quarterly instalments in advance, commencing on thefirst day of the first quarter which begins after the Construction CommitmentDate.

(c) For each calendar year or part thereof after the Commercial Operation Date,the WAGP Authority shall notify the Company in advance of its fundingrequirement (in US dollars) for its activities as described in this Agreementand the WAGP Treaty for that year in excess of retained funds, including for

the hiring of consultants or other services reasonably required for the WAGPAuthority for those activities, but excluding any costs of auditing theCompany which in accordance with Clause 10 are not to be included in thecalculation of the funding requirement (which costs shall be payable by theStates in accordance with Clause 9.5). The funding requirement notified bythe WAGP Authority in accordance with this paragraph shall be a reasonableamount for the carrying out of the activities to which the funding relates, andshall include a detailed breakdown of the anticipated expenditure of theWAGP Authority. The Company shall provide a copy of that detailed

breakdown to all Shippers.

(d) The funding requirements notified by the WAGP Authority in accordancewith paragraphs (b) and (c) above may include a component (which shall not

be greater than 10% of the entire funding requirement for that calendar year)which is a contingency amount. The WAGP Authority may accumulatecontingency amounts and other unspent funds in a contingency account, whichshall be invested in secure liquid investments by the WAGP Authority. Anyamount in the contingency account may be utilised by the WAGP Authorityfor its funding requirements if for any reason there is a shortfall in the fundingof the WAGP Authority out of monies received from the WAGP AuthorityCharge or other sources.

(e) With effect from the Commercial Operation Date, the Company shall (subjectto paragraphs (f) and (h) below) charge Shippers a monthly WAGP AuthorityCharge, which will be a separate, identifiable charge to support the operationof the WAGP Authority. The WAGP Authority Charge will comprise eachmonth:

(i) a levelised (in real terms, per annum) amount necessary to recoverover a 10-year period (or such longer period as may be agreed inaccordance with paragraph (j) below) the amounts paid by theCompany pursuant to paragraphs (a) and (b) above together withInterest thereon of 12% per annum; plus

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(ii) an amount equal to the funding requirement notified by the WAGPAuthority under paragraph (c) above for that year divided by 365 (or366 in a leap year) and multiplied by the number of days in that month.

(f) Subject to paragraph (h) below the Company shall charge Shippers the WAGPAuthority Charge in all months after the Commercial Operation Date,allocated between all Shippers in proportion to their Reserved Capacity,

provided however that the amount charged to and payable by such Shippersshall be reduced proportionately to the extent that their obligation to pay forReserved Capacity is reduced in that month due to events of force majeure, ordefault by the Company, under their respective Gas TransportationAgreements. If the Company is in default under a Gas TransportationAgreement and as a consequence a Shipper is relieved from paying an amountwhich it would otherwise have been liable to pay in accordance with this

paragraph, the Company shall nevertheless be liable to pay that amount to theWAGP Authority.

(g) The Company shall, as soon as practicable following receipt thereof, pay tothe WAGP Authority all amounts received by the Company under paragraph(f) above in respect of a month less the amount in respect of that monthcalculated under sub-paragraph (d)(i) above.

(h) Notwithstanding paragraphs (a),(b),(c) and (d) above, the WAGP AuthorityCharge shall not exceed in any month an amount determined in accordancewith paragraph (i) below per MMBtu (or its volumetric equivalent) ofReserved Capacity per day, and the amount to be charged by the Company inrespect of the funding requirement notified by the WAGP Authority, and paid

over to the WAGP Authority in accordance with paragraph (g) abovefollowing receipt, shall not exceed that amount minus the amount calculatedunder sub-paragraph (d)(i) above.

(i) The amount referred to in paragraph (h) above shall be:(i) In the calendar year in which the Commercial Operation Date occurs,

and the following 9 calendar years, an amount determined by thefollowing formula:

US$0.013 x (IY I0 ); and

(ii) In all subsequent calendar years, an amount determined by thefollowing formula:

US$0.007 x (IY I0 ),

in each case where:

I0 = The average of the Inflation Index for the twelvecalendar months up to and including October 31 prior tothe calendar year in which the Final Investment

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Decision occurs; and

IY = The average of the Inflation Index for the twelvecalendar months up to and including October 31 prior tothe calendar year for which the calculation is being

made.

(j) Notwithstanding paragraph (g) above, if it appears likely that there will be ashortfall in the funding of the WAGP Authority because of the cap referred toin paragraph (h) above and the recovery by the Company of the amountsreferred to in sub-paragraph (e)(i) above, the Company and the WAGPAuthority may agree in writing that the amount payable to the WAGPAuthority under paragraph (g) above shall be increased by deferring therecovery by the Company of the amount due to it as calculated under sub-

paragraph (e)(i) above. Such an agreement may include provisions for theinclusion in the WAGP Authority Charge of an amount for the recovery by the

Company in accordance with sub-paragraph (e)(i) above over a period longerthan 10 years.

Costs in excess of receipts pursuant to Clause 9.4

9.5 The States shall ensure that the WAGP Authority has adequate resources toperform its functions as contemplated under this Agreement and the

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