North Baja Pipeline, LLC

Original Volume No. 1

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

Original Sheet No. 121 Original Sheet No. 121 : Effective

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

9. OPEN SEASON PROCEDURES (Continued)

9.1 Open Seasons for Existing Capacity (Continued)

(d) Valuation of Bids (Continued)

The specific bid evaluation methodology to be used,

including, where appropriate, the data to be used for

evaluation of Negotiated Rate Formula bids, will be included

as part of NBP's open season posting under Paragraph 9.1(a)

with sufficient specificity to allow a prospective shipper

to calculate the value of its bid and duplicate NBP's

results.

Irrespective of whether a bid(s) has the highest NPV of the

bids received, NBP may reject bids for service that (i) may

detrimentally impact the operational integrity of NBP's

system; (ii) do not satisfy all the terms of the specified

posting; or (iii) contain terms and conditions other than

those set forth in NBP's FERC Gas Tariff.

If the NPV of any Negotiated Rate revenues would exceed the

NPV of the revenue stream produced by paying the Maximum

Rate over the same period of time, then the Shipper bidding

the Negotiated Rate shall be considered to be paying the

Maximum Rate for the purpose of determining the bid with the

highest economic value.

(e) If NBP accepts the winning bid(s) and tenders a Service

Agreement, requestor(s) shall complete and return the

Service Agreement on a timely basis.

(f) Except as provided in Paragraph 19, NBP shall not be

obligated to tender or execute a Service Agreement for

service at any rate less than the Maximum Rate set forth in

the Statement of Effective Rates and Charges for

Transportation of Natural Gas applicable to the service

requested.

(Continued)