(a) All gas produced from or allocated to your Indian lease is subject to royalty except the following:

1. (1) Gas that is unavoidably lost.
2. (2) Gas that is used on, or for the benefit of, the lease.
3. (3) Gas that is used off-lease for the benefit of the lease when the Bureau of Land Management (BLM) approves such off-lease use.
4. (4) Gas used as plant fuel as provided in § 1206.179(e).

(b) You may use royalty-free only that proportionate share of each lease's production (actual or allocated) necessary to operate the production facility when you use gas for one of the following purposes:

1. (1) On, or for the benefit of, the lease at a production facility handling production from more than one lease with BLM's approval.
2. (2) At a production facility handling unitized or communitized production.