North Baja Pipeline, LLC

Original Volume No. 1

Effective Date: 07/30/2008, Docket: RP09-208-000, Status: Effective

First Revised Sheet No. 175 First Revised Sheet No. 175

Superseding: Original Sheet No. 175

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

19. CAPACITY RELEASE (Continued)

19.7 Allocation of Parcels (Continued)

(a) Primary Allocation (Continued)

Option 3 - Net Revenue. Bids will be given priority based

on the net revenue for the term of the bid.

If Releasing Shipper does not specify an option for

determining best bid, Option 2 will be the default option

used.

Under all options, NBP will evaluate and rank all bids for

Parcels.

(b) Right of First Refusal

In the case of a Prearranged Shipper's bid for a Parcel, at

a rate other than at the highest valued bid, pursuant to the

methodology specified by the Releasing Shipper, if the bid

submitted by a subsequent Replacement Shipper exceeds the

value of the Prearranged Shipper's bid, the Prearranged

Shipper will be allowed to match the higher valued bid. The

Prearranged Shipper will be allowed a match period, as

specified in Paragraph 19.8, to match the higher valued bid,

otherwise, the allocation will be awarded to subsequent

Replacement Shipper(s) in accordance with the primary and

secondary allocation mechanisms.

To the extent there is more than one Replacement Shipper

submitting a winning bid, the Parcel shall be allocated

based on one of the following tie-breaker methodologies to

be selected by the Releasing Shipper: pro rata, lottery,

order of submission (first come/first serve), or by a method

designated by the Releasing Shipper. Releasing Shipper's

method must be objectively stated, applicable to all

bidders, nondiscriminatory, administratively feasible as

determined by NBP and in accordance with NBP's FERC Gas

Tariff.

(Continued)