North Baja Pipeline, LLC

Original Volume No. 1

Effective Date: 08/12/2002, Docket: RP02-363-000, Status: Effective

Original Sheet No. 11 Original Sheet No. 11 : Effective

RATE SCHEDULE FTS-1

FIRM TRANSPORTATION SERVICE

(Continued)

3. RATES (Continued)

3.2 Commodity Charge

The Commodity Charge shall be the product of the quantities of gas

delivered in the month (in Dth) and the Commodity Rate as set

forth on effective Tariff Sheet No. 4.

3.3 Applicability of Surcharges

Shipper shall pay all reservation and usage surcharges applicable

to the service provided to such Shipper as set forth in NBP's FERC

Gas Tariff, Original Volume No. 1; such surcharges shall be deemed

to be part of Shipper's Reservation and Commodity Charges.

3.4 Discounts

Shipper shall pay the Maximum Reservation Charge and the Maximum

Commodity Charge for service under this Rate Schedule unless NBP

offers to discount the Reservation Rate, the Commodity Rate or any

discountable surcharges. If NBP elects to discount any such rate,

NBP shall, by written notice, advise Shipper of the effective date

of such charges and the quantity of gas so affected; provided,

however, such discount shall not be anti-competitive or unduly

discriminatory between individual shippers.

3.5 Negotiated Rates

Notwithstanding any provision of NBP's Tariff to the contrary, NBP

and Shipper may mutually agree in writing to a Negotiated Rate

(including a Negotiated Rate Formula) with respect to the rates,

rate components, charges, or credits that are otherwise

prescribed, required, established, or imposed by this Rate

Schedule or by any other applicable provision of NBP's Tariff.

Such Negotiated Rate shall be set forth in Attachment B to the

Shipper's Firm Transportation Service Agreement and NBP shall make

any filings with FERC necessary to effectuate such Negotiated

Rate.

(Continued)