North Baja Pipeline, LLC

Original Volume No. 1

Effective Date: 12/01/2006, Docket: RP07- 52-000, Status: Effective

First Revised Sheet No. 199 First Revised Sheet No. 199 : Effective

Superseding: Original Sheet No. 199

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

38. SALES OF EXCESS GAS

NBP may from time to time purchase or sell gas on an interruptible basis

as necessary to manage system pressure and maintain system integrity.

39. DISCOUNT POLICY

39.1 NBP may from time to time offer a discount to the maximum

applicable rate for service under any service agreement governed by

this FERC Gas Tariff.

39.2 Types of Discounts

From time to time, NBP and Shipper may agree in writing on a level

of discount of the otherwise applicable rates and charges in

addition to a basic discount from the maximum rates. For example,

NBP may provide a specific discount rate based on:

(a) achievement of specified quantity levels (including quantity

levels above, below, or equal to a specified level);

(b) specified time periods;

defined geographic areas, or transportation paths;

(d) a specified relationship to the quantities actually

transported (i.e., that the rates shall be adjusted in a

specified relationship to the quantities transported); or

(e) a formula including, but not limited to, published index prices

for specific receipt and/or delivery points or other agreed

upon published pricing reference points for price determination

(such discounted rate may be based upon the differential

between published index prices or arrived at by formula). Such

discounted rate: (1) shall not change the underlying rate

design; (2) shall not include any minimum bill or minimum take

provision that has the effect of guaranteeing revenue; and (3)

shall, in each service agreement entered into pursuant to

Section 39.2(e), define the rate component(s) to be discounted.

In all circumstances the discounted rate shall be between the

maximum rate and the minimum rate applicable to the service

provided.

(Continued)