North Baja Pipeline, LLC

Original Volume No. 1

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

Original Sheet No. 104 Original Sheet No. 104 : Effective

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

1. DEFINITIONS (Continued)

1.25 Forward Haul: The term "Forward Haul" shall refer to

transportation service on NBP's system in which the nominated

direction of flow from receipt point to delivery point is in the

same direction as physical gas flow on the NBP system.

1.26 Backhaul: Transportation service on NBP's system in the opposite

direction of a Forward Haul as defined in Paragraph 1.25 above.

1.27 Primary Path: The transportation path established by the receipt

and delivery points as set forth in Shipper's executed Service

Agreement. A Shipper's Primary Path may be either a Forward Haul

or a Backhaul as defined in Paragraphs 1.25 and 1.26 above.

1.28 Reverse Path: The transportation path that is in the opposite

direction of that Shipper's Primary Path as defined in Paragraph

1.27 above. A Shipper's Reverse Path may be either a Forward Haul

or a Backhaul as defined in Paragraphs 1.25 and 1.26 above.

Reverse Path transactions rely upon secondary point rights and are

subject to the operating conditions of NBP's pipeline and will not

be made available to Shipper if NBP determines, in its sole

discretion, that such transportation is operationally infeasible

or otherwise not available.

1.29 Negotiated Rate: A rate (including a Negotiated Rate Formula)

that NBP and a Shipper have agreed will be charged for service

under Rate Schedules FTS-1, ITS-1, or PAL-1 where, for all or a

portion of the contract term, one or more of the individual

components of such rate may exceed the maximum rate, or be less

than the minimum rate, for such component set forth in NBP's

tariff for the given service. Any Agreement entered into after

the effective date of this subsection which provides for a rate

under Rate Schedules FTS-1, ITS-1, PAL-1 other than the applicable

maximum rate shall contain a provision setting out the mutual

agreement of the parties as to whether the pricing terms represent

a discounted rate or a negotiated rate.

(Continued)