North Baja Pipeline, LLC

Original Volume No. 1

Effective Date: 03/26/2007, Docket: RP07-305-000, Status: Effective

First Revised Sheet No. 163 First Revised Sheet No. 163 : Effective

Superseding: Original Sheet No. 163

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

19. CAPACITY RELEASE

19.1 Eligibility to Release

Any firm Shipper which contracts for firm transportation service

under Part 284 of the Commission's regulations (Releasing Shipper)

is eligible to release all or part of its capacity (Parcel) for

use by another party (Replacement Shipper). Any Replacement

Shipper, which has previously contracted for a Parcel, may also

release its capacity to another party as a Secondary Release

subject to the terms and conditions described herein.

Upon releasing a Parcel, consistent with the terms and conditions

described herein, all Releasing Shippers shall remain ultimately

liable for all reservation charges billable for the originally

contracted service. The Releasing Shipper, whether a primary or

secondary capacity holder, must post the capacity it seeks to

release on NBP's Internet website prior to the close of the

Posting Period defined herein.

A Releasing Shipper may release all or a portion of its capacity

for the remaining term of its contract on either a temporary or

permanent basis. In the event of a permanent capacity release by

a Shipper paying the maximum recourse rate, the Right of First

Refusal is conveyed to the Replacement Shipper for that portion

permanently released. NBP may not unreasonably refuse to relieve

the Releasing Shipper of liability under its contract and

extinguish Releasing Shipper's contractual obligations to NBP with

respect to that portion requested to be permanently released

provided that: 1) the Replacement Shipper is creditworthy

pursuant to NBP's credit standards; and 2) the rate paid by the

Replacement Shipper is no less than the rate contracted between

the Releasing Shipper and NBP for the remaining term of the

contract or the maximum tariff rate, whichever is less. NBP may

refuse to allow a permanent capacity release if it has a

reasonable basis to conclude that it will not be financially

indifferent to the release. If Shipper's request to permanently

release capacity is denied by NBP, NBP shall notify Shipper via e-

mail and shall include in the notification the reasons for such

denial.

(Continued)