North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 08/12/2002, Docket: RP02-363-002, Status: Effective

First Revised Sheet No. 151 First Revised Sheet No. 151 : Effective

Superseding: Original Sheet No. 151

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

16. BALANCING (Continued)

16.1 (Continued)

(a) Actual delivered quantity exceeds MDQ (Continued)

An imbalance shall exist when NBP has not authorized

deliveries in excess of a Shipper's MDQ because the

operational integrity of NBP's system is threatened. Under

these circumstances, NBP may, without notice, adjust Shipper

requests for confirmation from receipt or delivery markets

on NBP's system. In addition, NBP may issue an Operational

Flow Order consistent with Paragraph 18 of these General

Terms and Conditions of Service, and Shipper will be subject

to tolerances and penalties as provided for in Paragraph

18.5.

(b) Actual delivered quantity exceeds actual confirmed receipt

quantity

A net negative imbalance shall exist if the difference

between the quantity received (nominated, scheduled, and

confirmed) and the quantity delivered, taking into account

the reduction in quantity for compressor fuel use, yields a

negative result. Commencing upon notification by NBP of the

existence of the negative imbalance, and to the extent that

the NBP system is not constrained or its integrity is not

threatened and NBP has not issued an Operational Flow Order,

Shipper shall have three (3) days to correct the imbalance.

Remedies:

Where NBP has facilities in place, NBP may utilize flow

control to limit shipper deliveries to even hourly rates

equal to one twenty-fourth (1/24th) of a Shipper's Maximum

Daily Quantity, consistent with Paragraph 14.5 of these

General Terms and Conditions of Service. Shippers may

schedule with NBP using the nomination process to eliminate

or reduce negative imbalances. Shippers may also resolve

negative imbalances through the use of Rate Schedule PAL-1

Service. In addition, in accordance with this Paragraph 16,

Shipper may net or trade imbalances to eliminate or reduce

negative imbalances.

(Continued)