North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 08/12/2002, Docket: RP02-363-008, Status: Effective

Second Revised Sheet No. 153 Second Revised Sheet No. 153 : Effective

Superseding: First Revised Sheet No. 153

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

16. BALANCING (Continued)

16.1 (Continued)

(c) Actual confirmed receipt quantity exceeds actual delivered

quantity (Continued)

Remedies:

Shippers may schedule with NBP using the nomination process

to eliminate or reduce positive imbalances. Shippers may

also resolve positive 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 positive imbalances.

If, at the end of the three (3) day period the difference

between the actual quantity received and the delivered

quantity is in excess of five (5) percent of the delivered

quantity or 1000 Dth, whichever is greater, the excess

quantity shall be subject to a penalty equal to twice the

rate for service under Rate Schedule ITS-1 as set forth on

effective Tariff Sheet No. 4. If the imbalance is not

corrected within 45 days of NBP's notice of an imbalance, NBP

shall be able to retain the remaining imbalance quantity

without compensation to the Shipper and free and clear of any

adverse claim. Quantities retained by NBP will be sold in

accordance with Paragraph 38 of these Transportation General

Terms and Conditions, and the proceeds from the sale of the

confiscated gas will be credited to all shippers in

accordance with Paragraph 16.1 (d).

In the event the operational integrity of NBP's system is

threatened, 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.

Imbalance determinations as described above will be

performed on a daily basis and each daily occurrence will

constitute a separate incident. It is recognized and

understood that in the event more than one penalty provision

may apply to a single imbalance incident, only the most

onerous penalty will apply.

(Continued)