North Baja Pipeline, LLC

Original Volume No. 1

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

Original Sheet No. 180 Original Sheet No. 180 : Effective

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

19. CAPACITY RELEASE (Continued)

19.12 Crediting, Billing Adjustments and Refunds

(a) Eligibility

NBP shall provide revenue credits to any Releasing Shipper

which releases capacity to a Replacement Shipper pursuant to

the provisions of Paragraph 19. NBP and Shipper may, in

connection with a Negotiated Rate Agreement under a firm

rate schedule, agree upon payment obligations and crediting

mechanisms in the event of a capacity release that varies

from, or are in addition to, those set forth in this

Paragraph 19.12; provided, however, that terms and

conditions of service may not be negotiated.

(b) Monthly Crediting Procedure

Revenue credits for released capacity shall be credited

monthly as an offset to a Releasing Shipper's reservation

charge (or the volumetric equivalent of the reservation

charge on a one hundred percent (100%) load-factor basis

applicable to the Releasing Shipper. This shall also be

referred to in this Paragraph 19.12 as the equivalent

volumetric rate) payable to NBP under the applicable rate

schedule for the service that has been released. NBP shall

credit each month to the Releasing Shipper's account one

hundred percent (100%) of the revenues from the charges

invoiced to the Replacement Shipper(s) for the reservation

charge (or equivalent volumetric rate).

NBP shall apply the revenues received from Replacement

Shippers first to the reservation charge (or equivalent

volumetric rate). Should Replacement shipper default on

payment to NBP of the reservation charge (or equivalent

volumetric rate) NBP shall bill Releasing Shipper for such

unpaid charges and apply interest to such adjustments in

accordance with the provisions of Paragraph 7 of these

General Terms and Conditions of Service.

(Continued)