North Baja Pipeline, LLC

Original Volume No. 1

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

Original Sheet No. 170 Original Sheet No. 170 : Effective

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

19. CAPACITY RELEASE (Continued)

19.6 Bidding for a Parcel (Continued)

(a) Preliminary Qualification (Continued)

Any potential Replacement Shipper may submit a bid for

parcels posted for release. NBP will determine the highest

valued bid, based on the bid evaluation method selected by

the Releasing Shipper, and verify that the Shipper placing

the bid meets NBP's credit requirements before awarding the

parcel. Upon notification by NBP of an award of a parcel,

NBP shall complete a new FTS-1 contract with the particulars

of the awarded parcel and Replacement Shipper shall execute

this new contract electronically through the use of an

authorization code procedure on NBP's Internet website.

Once a Replacement Shipper has acquired capacity, authority

is granted to the Replacement Shipper to release that

capacity, unless the Releasing Shipper has specified that

the parcel cannot be re-released.

The execution of the FTS-1 service agreement will constitute

an obligation on the part of the Replacement Shipper to be

bound by the terms and conditions of NBP's capacity release

program as set forth in these General Terms and Conditions

of Service.

(b) Submitting a Bid

All bids must be submitted through the use of NBP's Internet

website. Such bids shall be "open" for all participants to

review. The particulars of all bids will be available for

review but not the identity of bidders. NBP will post the

identity of the winning bidder(s) only.

(Continued)