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. 188 Original Sheet No. 188 : Effective

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

24. NEGOTIATED RATES

24.1 Availability. Notwithstanding anything to the contrary contained

in this Tariff, including the provisions of the rate schedules

contained herein, NBP and Shipper may mutually agree to a

Negotiated Rate under any Agreement, provided that Shipper has

not acquired its capacity on a temporary basis under the capacity

release provisions of Paragraph 19 of these General Terms and

Conditions of Service. If a portion of the capacity under any

existing Agreement is agreed to be priced at Negotiated Rates,

the existing maximum or discounted tariff rates will continue to

apply to the capacity not subject to the Negotiated Rates. As

recourse to the Negotiated Rates, any Shipper may receive service

at applicable maximum tariff rates, including surcharges. The

Negotiated Rate may be less than, equal to, or greater than the

maximum applicable tariff rate; may be based on a rate design

other than straight-fixed variable; and may include a minimum

quantity. NBP's Recourse Rates shall be available to any Shipper

that does not agree to a Negotiated Rate. Recourse rates are set

forth on the Rate Sheets within this Tariff.

NBP and a Shipper may agree to a Negotiated Rate for the entire

term of a Transportation Service Agreement, or may agree to a

negotiated rate for some portion of the term of a Transportation

Agreement. NBP and Shipper may agree to apply the Negotiated

Rate to all or a portion of capacity under Shipper's Firm

Transportation Service Agreement.

During the period a Negotiated Rate is in place, the Negotiated

Rate shall govern and apply to the Shipper's service under the

Negotiated Rate Agreement and the otherwise applicable rate, rate

component, charge or credit which the parties have agreed to

replace with the Negotiated Rate shall not apply to, or be

available to, the Shipper. Only those rates, rate components,

charges or credits identified by NBP and Shipper in writing as

being superseded by a Negotiated Rate shall be ineffective during

the period that the Negotiated Rate is effective; all other

rates, rate components, charges, or credits prescribed, required,

established or imposed by this Rate Schedule or Tariff shall

remain in effect. At the end of the period during which the

Negotiated Rate is in effect, the otherwise applicable tariff

rates or charges shall govern any service provided to Shipper.

(Continued)