North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 09/27/2004, Docket: RP04-507-000, Status: Effective

First Revised Sheet No. 125 First Revised Sheet No. 125 : Effective

Superseding: Original Sheet No. 125

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

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

AGREEMENT (Continued)

10.4 (Continued)

period the original capacity holder agrees to pay the maximum

authorized rate, the original capacity holder may determine the

term it desires and NBP must extend the original capacity holder's

contract accordingly. Only term extensions of one (1) year or

greater from the original termination date will allow the existing

shipper to retain its right of first refusal.

10.5 Shippers who terminate their service agreements are not liable for

any reservation charges or other charges applicable to the new

Shipper contracting for this capacity.

10.6 Only valid bids will be accepted. In order for a bid to be

considered valid, a bidder must be deemed creditworthy per

Paragraph 12 of these General Terms and Conditions of Service by

the close of the bid period. All bids not withdrawn prior to the

close of the bid period shall be binding. At the end of the bid

period, NBP will evaluate the bids and determine the bid(s) having

the greatest economic value as determined in Paragraph 9.1(d)of

these General Terms and Conditions of Service. Bidders may submit

valid bids for all or a portion of the capacity that is subject to

a right of first refusal provided that the original contract path

is maintained.

10.7 Right of first refusal rights held by Shipper continue to apply

following an election of termination pursuant to existing

evergreen language contained in Shipper's Firm Transportation

Service Agreement. A Shipper that holds evergreen rights in

addition to a right of first refusal under a Firm Transportation

Service Agreement must first elect termination under the evergreen

provision in order to initiate the right of first refusal process.

When either NBP or Shipper elects termination under an evergreen

provision, NBP shall not be obligated to continue Shipper's

evergreen rights on a contract extended through the right of first

refusal process. Shippers may exercise their right of first

refusal rights consistent with this Paragraph 10.

10.8 When a right of first refusal process has been completed and there

has been no award of capacity, the capacity will be offered

pursuant to General Terms and Conditions of Service Section 9.1,

which governs NBP's sale of generally available capacity where

there is no shipper with right of first refusal rights.