North Baja Pipeline, LLC

Original Volume No. 1

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

Original Sheet No. 32 Original Sheet No. 32 : Effective

RATE SCHEDULE PAL-1

PARKING AND LENDING SERVICE

(Continued)

3. RATES (Continued)

3.2 Fuel: Shipper shall not be required to furnish fuel for service

under this Rate Schedule.

3.3 Third Party Charges: Shippers will be responsible for delivering

their Gas into and receiving their Gas from NBP's facilities. If

the Shipper requests, NBP may contract with Third Parties in order

to transport or store the Shipper's Gas on Third Party facilities.

In that event, the Shipper will reimburse NBP for all charges NBP

is billed by the Third Party as well as for the cost of fuel.

3.4 Negotiated Rates: Shipper and NBP may mutually agree, pursuant to

the provisions of Paragraph 24 of the General Terms and Conditions

of Service, to a negotiated rate, which rate shall be less than,

equal to, or greater than NBP's Maximum Rate. Such rates may be

based upon a rate design other than Straight Fixed Variable (SFV).

Such negotiated rate shall be set forth in the executed PAL

Service Agreement, and in NBP's FERC Gas Tariff.

4. OPERATIONAL REQUIREMENTS OF NBP

4.1 Shipper may be required, upon notification from NBP, to cease or

reduce deliveries to, or receipts from, NBP hereunder within a Day

consistent with NBP's operating requirements. Further, Shipper

may be required to return loaned quantities or remove parked

quantities upon notification by NBP. Such notification shall at a

minimum be provided by posting on NBP's Internet website, and may

also be provided by other means of communication. NBP's

notification shall specify the timeframe within which parked

quantities shall be removed and/or loaned quantities shall be

returned, consistent with NBP's operating conditions, but in no

event shall the specified time be sooner than the next day after

NBP's notification, subject to the following conditions:

(Continued)