North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 07/27/2005, Docket: RP05-518-000, Status: Effective

Original Sheet No. 8A Original Sheet No. 8A : Effective






Explanatory Footnotes for Negotiated Rates

Under Rate Schedule FTS-1


5/ (Continued)


(2) This provision applies only to the portion of capacity held by

Shipper in excess of 90,000 Dth.

(3) The New Rate shall only apply for the duration of the term of

service provided to the Third Party Shipper, but in no event shall

apply beyond the term of this rate protection provision.

(4) This provision terminates December 31, 2017. If the capacity held

by Shipper is permanently assigned or released to a similarly-

situated replacement shipper, the rate protection provision shall be

extended to such replacement shipper.


6/ The transportation rate under this Agreement is a negotiated rate

consisting of a monthly reservation fee equal to $0.1019 times 30.4 days

for each month, plus a delivery rate of $0.0031 per Dth, plus ACA.

Shipper shall reimburse Transporter for fuel, line loss, and other

unaccounted for gas in kind at a rate of 0.7%. This rate shall be fixed

for the term of this Agreement.


Rate Protection Provision:

(1) This provision applies only to gas that is delivered to NBP at

Ehrenberg, AZ. To the extent NBP and Gasoducto Bajanorte ("GB")

separately provide long-term (greater than 364 days) firm

transportation service to a Third Party Shipper in the Western Zone

at a combined rate that is lower than $0.270 per Dth on a 100% load

factor basis (excluding non-pipeline surcharges), or in the Mexicali

Zone at a combined rate that is lower than $0.245 per Dth, then the

rate applicable to Shipper for service on NBP shall be reduced in

accordance with the following formula:


NR = OR - ((CTR - TPR) x 0.4286)


Where: NR = New Rate level at which Shipper will receive service on

NBP. Resulting unit rate will be converted to a

reservation/delivery structure where the delivery rate

will equal three (3) percent of the NR;

OR = Shipper's negotiated Original Rate on NBP or $0.105 per

Dth on a 100% load factor basis;

CTR = Competitive Threshold Rate which is $0.270 per Dth for

the Western Zone and $0.245 per Dth for the Mexicali

Zone; and

TPR = Third Party Rate for the combined NBP and GP path.