North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 06/22/2009, Docket: RP09-608-000, Status: Effective

Fourth Revised Sheet No. 123 Fourth Revised Sheet No. 123

Superseding: Third Revised Sheet No. 123

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

10. RIGHT OF FIRST REFUSAL UPON TERMINATION OF FIRM SHIPPER'S SERVICE

AGREEMENT

Firm Shippers (original capacity holders) under NBP's firm transportation

rate schedules of this FERC Gas Tariff, Original Volume No. 1 who: (1)

hold capacity for terms greater than or equal to one (1) year at the

maximum authorized reservation charge or rate; or (2) hold multi-year

seasonal contracts at the maximum authorized reservation charge or rate,

shall have the right of first refusal at the expiration of their service

agreements, subject to the following procedures. Original capacity holders

must notify NBP one (1) year prior to the primary expiration date of their

service agreements whether they elect to terminate or not to terminate the

service agreements. The right of first refusal does not apply to interim

service agreements for capacity that has been sold on a pre-arranged basis

pursuant to Paragraph 8.1(b) of these General Terms & Conditions.

One (1) year prior to the expiration of the service agreement, NBP will

post a notice on its Internet website that the original capacity holder's

service agreement will expire and whether the original capacity holder has

either elected or not elected to terminate pursuant to this paragraph.

10.1 In the event original capacity holder elects termination, original

capacity holder shall no longer hold a right of first refusal and

NBP shall subject the capacity to a bidding process. NBP will

commence open bidding no later than three (3) months prior to the

service agreement expiration. The bid period will be no less than

five (5) business days in duration. NBP will announce the bid

winner(s) as soon as practicable after the close of the bid period,

provided, however, that NBP will have no obligation to accept any

bid(s) at rates less than the maximum applicable rate in effect.

Tied bids will be awarded on a pro rata basis. Winning Shipper(s)

and NBP must execute a new firm transportation service agreement

prior to service commencement or within thirty (30) days of a

capacity award, whichever is sooner.

10.2 In the event original capacity holder does not elect termination,

NBP will commence open bidding no later three (3) months prior to

the service agreement expiration. The bid period will be no less

than five (5) business days in duration. NBP will notify the

original capacity holder of any acceptable bid(s) as soon as

practicable, provided, however, that NBP will have no obligation to

accept any bid(s) at rates less than the maximum applicable rate in

effect. Acceptable bids will be those having the greatest economic

value as determined in Paragraph 9.1(d) of these General Terms and

Conditions of Service. In the event that NBP does not receive any

acceptable bids, the original capacity holder shall not be entitled

to continue to receive transportation service upon (Continued)