North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 08/12/2002, Docket: RP02-363-000, Status: Effective

Original Sheet No. 169 Original Sheet No. 169 : Effective

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

19. CAPACITY RELEASE (Continued)

19.5 Posting of a Parcel (Continued)

Parcels may be withdrawn subsequent to the close of the Posting

Period and up until the close of the Bid Period only in situations

where the Releasing Shipper has an unanticipated need for the

capacity. In such instances, Releasing Shipper shall notify NBP

electronically of its need to withdraw the Parcel due to an

unanticipated need for the capacity. The withdrawal or revision

of a Parcel will terminate all bids submitted for that Parcel to

date. Replacement Shippers will need to resubmit their bids for

the Parcel if the Parcel is resubmitted for release.

19.6 Bidding for a Parcel

(a) Preliminary Qualification

Replacement Shippers are encouraged to pre-qualify in

advance of any postings on NBP's Internet website as credit

requirements will take differing amounts of time to process

depending on the particular financial profile of Replacement

Shippers. The pre-qualification process will authorize a

pre-set maximum monthly financial exposure level for the

Replacement Shipper. Such exposure levels may be adjusted

by NBP periodically re-evaluating a Replacement Shipper's

credit-worthiness.

Releasing Shippers may exercise their option to waive the

credit requirements for any Replacement Shipper wishing to

bid on a Parcel posted by that Releasing Shipper. Such

waiver must be made on a nondiscriminatory basis. NBP must

be informed of such waiver via the Internet website before

it will authorize such Replacement Shipper's participation

with respect to that particular Parcel. In this instance, no

pre-set maximum monthly financial exposure level is

applicable.

Should a Releasing Shipper waive the credit requirements for

a Replacement Shipper, the Releasing Shipper shall be liable

for all charges incurred by the Replacement Shipper in the

event such Replacement Shipper defaults on payment to NBP

for such capacity release service.

(Continued)