June 1, Ms. Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426

Transcription

1 June 1, 2010 Ms. Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE Washington, DC North Baja Pipeline, LLC 717 Texas Street, Suite 2400 Houston, TX John A. Roscher Director, Rates & Tariffs tel fax web Via etariff Filing Re: North Baja Pipeline, LLC Negotiated Rate Agreement Docket No. RP10- - Dear Ms. Bose: Pursuant to Section 4 of the Natural Gas Act ( NGA ) and Part 154 of the Regulations of the Federal Energy Regulatory Commission ( FERC or Commission ), North Baja Pipeline, LLC ( NBP ) respectfully submits for filing to be part of its FERC Gas Tariff, First Revised Volume No. 1 ( Tariff ), Section 8.3 (v.0.0.0) containing a new Rate Schedule FTS-1 negotiated rate agreement ( Agreement ) between NBP and Sempra LNG Marketing, LLC ( Sempra LNG ) 1 that contains terms that deviate from NBP s Rate Schedule FTS-1 Form of Service Agreement ( FSA ). Additionally, NBP is submitting revised sections to its Tariff 2 to reference the Agreement as a negotiated rate agreement and as an agreement that contains non-conforming provisions. NBP respectfully requests that the Commission accept the tariff sections submitted herein, and listed at Appendix A, to become effective June 1, Sempra LNG Marketing, LLC was formerly known as Sempra LNG Marketing Corp. 2 Specifically, NBP is submitting revised Sections 1 (v.2.0.0), (v.1.0.0), (v.1.0.0), and 4.3 (v.1.0.0) along with new Section 8.3 (v.0.0.0).

2 Correspondence The names, titles and mailing address of the persons to whom correspondence and communications concerning this filing should be directed are as follows: * Eva N. Neufeld John A. Roscher Associate General Counsel Director, Rates & Tariffs North Baja Pipeline, LLC * Joan Collins 717 Texas Street, Suite 2400 Manager, Tariffs & Compliance Houston, Texas North Baja Pipeline, LLC Tel. (832) Texas Street, Suite 2400 eva_neufeld@transcanada.com Houston, Texas Tel. (832) joan_collins@transcanada.com * Persons designated for official service pursuant to Rule Statement of the Nature, Reasons, and Basis for Filing On May 10, 2005, in Docket No. RP , NBP, Sempra LNG, and Termoelectrica de Mexicali, S. de R.L. de C.V. ( TDM ) (collectively Petitioners ) filed a joint petition for a limited, case-specific waiver of the competitive bidding requirements of the Commission s capacity release regulations 3 in order to allow a direct assignment of TDM s long-term negotiated rate contract and associated firm capacity to Sempra LNG. The Petitioners request for a waiver allowing a direct assignment of firm capacity was intended to allow for capacity rationalization on NBP s system in anticipation of an eventual flow reversal of the system to serve energy markets in the Southwest United States. On June 20, 2005, the Commission issued a Letter Order 4 that granted the Petitioners request. The Agreement included in the instant filing reflects the culmination of the waiver approved by the Commission in 2005, and completes the direct assignment of TDM s firm service capacity rights to Sempra LNG. The Agreement, which contains the same negotiated transportation rate previously agreed to between TDM and NBP, has been slightly modified 3 18 C.F.R. Section North Baja Pipeline, LLC, 111 FERC 61,435 (2005). 2

3 from the original agreement between NBP and TDM to mirror other currently effective Rate Schedule FTS-1 agreements between NBP and Sempra LNG and to add a surcharge related to flow reversal on NBP s system. Negotiated Rate Contract Consistent with the Commission s 1996 negotiated rate Policy Statement, 5 which requires pipelines to file either negotiated rate contracts or tariff sheets identifying and describing negotiated rate transactions, 6 NBP is filing proposed Sections (v.1.0.0) and (v.1.0.0) of its Tariff to provide the details of the Agreement. Specifically, NBP has referenced the Agreement in its list of negotiated rate agreements under Rate Schedule FTS-1 in Section (v.1.0.0), 7 and modified the original negotiated rate terms in footnote 7 in Section (v.1.0.0) to reflect the collection of costs related to the flow reversal of the NBP system. NBP has additionally deleted from footnote 7 notations regarding expired MDQ tiers. With regard to the requirements for negotiated rate filings, the Commission has stated that in any pipeline filing of a negotiated rate agreement, any other agreement, understanding, negotiation or consideration linked to the agreement must be disclosed by the pipeline s filing. 8 NBP advises that no undisclosed agreements, etc., are linked to the Agreement submitted herein. NBP notes that as a housekeeping measure, in Section (v.1.0.0) NBP added two (2) additional references and deleted two (2) existing references to the list of negotiated rate agreements under Rate Schedule FTS-1, and in Section (v.1.0.0) NBP has updated 5 Statement of Policy on Alternatives to Traditional Cost-of-Service Ratemaking for Natural Gas Pipelines and Regulation of Negotiated Transportation Services of Natural Gas Pipelines, 74 FERC 61,076 (1996) ( Policy Statement ). 6 Northern Natural Gas Co., 77 FERC 61,035 at 61,138 (1996). 7 As a result of the direct assignment of TDM s firm capacity to Sempra LNG, NBP replaced the reference to TDM in Section (v.1.0.0) with a reference to Sempra LNG. 8 Columbia Gulf Transmission Company, 85 FERC 61,373, at 62,424 (1998). 3

4 certain footnotes related to these agreements. 9 Proposed Sections (v.1.0.0) and (v.1.0.0) are included in Appendix A. Terms of Service which Deviate from the FTS-1 Form of Service Agreement As noted above, the Agreement was slightly modified from the original agreement between NBP and TDM to mirror other currently effective agreements between NBP and Sempra LNG. Several of the modifications deviate from NBP s FSA. As the Commission has made clear, there are two general categories of material deviations: (1) provisions the Commission must prohibit because they present a significant potential for undue discrimination among shippers; and (2) provisions the Commission can permit without a substantial risk of undue discrimination. 10 NBP points out, however, that in Docket No. RP the Commission reviewed language in other contracts between NBP and Sempra LNG which is essentially the same as the language in the Agreement which deviates from NBP s FSA. The Commission determined that the language deviations in question were either not material or were permissible material deviations. 11 The specific language is discussed in more detail below. (i) Modified Section 7.9 Noting Exhibits A and B A provision (Section 7.9) in the Agreement has been modified to note that Exhibits A and B to the Agreement contain certain additional provisions that are applicable to this Agreement and to provide that in the event of any conflict between the body of the 9 Four references have been updated in Section (v.1.0.0) to list the currently effective negotiated rate agreements entered into by NBP. The references for Gasoducto Rosarito S. De R.L. De. C.V. ( Rosarito ) and MGI Supply Ltd. ( MGI ) have been removed since Rosarito s contract term expired, and MGI s firm capacity was permanently assigned to Sempra LNG Marketing Corp. pursuant to waiver granted by Commission Letter Order issued December 15, 2004 in Docket No. RP , North Baja Pipeline, LLC, 109 FERC 61,269 (2004). The permanent assignment of MGI s capacity to Sempra LNG Marketing Corp. was administered through two negotiated rate contracts, which were filed with the Commission in Docket No. RP , and which represent the two additional references added in Section (v.1.0.0). Additionally, in Section (v.1.0.0), footnote 3 has been deleted in its entirety since it was tied to the expired Rosarito contract, and footnote 4 has been modified to incorporate language and delete notations regarding expired MDQ tiers originally associated with the MGI contract permanently assigned to Sempra LNG Marketing Corp. 10 See, e.g., Questar Pipeline Company, 129 FERC 61,017 (2009). 11 North Baja Pipeline, LLC, 131 FERC 61,092 (2010) ( April 30 Order ). 4

5 Agreement and the Exhibits, the Exhibits shall control. The referenced Exhibits contain language related to a minimum Btu for purposes of calculating MDQ, along with detailed evergreen options which may not be covered under Section 3.1 of NBP s FSA. In addition, Section 3.1 of the Agreement omits certain of the evergreen language from Section 3.1 of the FSA. The Commission reviewed essentially the same modifications in Docket No. RP Regarding the language related to a minimum Btu, the Commission determined in the April 30 Order that the minimum Btu provisions are permissible because they are consistent with the range of Btu content allowed on North Baja s system. 12 Regarding the evergreen language, the Commission found in the April 30 Order that Section 3.1 of the service agreement omitting the evergreen language from the pro forma service agreement is not material because it is consistent with Section 8.1 of the General Terms & Conditions of North Baja s tariff, and the evergreen provisions are permissible material deviations because Section 8.1 of North Baja s tariff permits the negotiation of evergreen provisions. 13 NBP respectfully requests that the Commission accept and approve these deviations in the Agreement as the Commission has already determined that they do not present a risk of undue discrimination. (ii) Modified Section 4.3 Regarding Delivery Pressure The second sentence of Section 4.3 of the FSA states Unless otherwise agreed, NBP shall deliver the gas to be transported hereunder to or for the account of Shipper at the pressures existing in NBP s system at the point(s) of delivery. This language has been replaced in the Agreement with the following language: Unless prevented from doing so because of conditions existing on a pipeline upstream of the facilities of NBP that are beyond NBP s responsibility and that cause a material deviation from the design assumptions for receipt of gas by NBP as reflected in NBP s filing with FERC for approval to construct and operate facilities under Section 7(c) of 12 April 30 Order, at P April 30 Order, at P 12 and P 13. 5

6 the Natural Gas Act, NBP shall deliver gas to Shipper at the interconnection with SoCal Gas at the pressure, given the design of the SoCal Gas system at the time of NBP s certificate application, sufficient to allow full delivery of Shipper s MDQ into the SoCal Gas system. The Commission reviewed the same language in Docket No. RP and found in its April 30 Order that the pressure provision is a permissible material deviation because the negotiated pressure is consistent with the pro forma service agreement provision permitting the parties to negotiate pressures at points of delivery. 14 NBP respectfully requests that the Commission accept and approve these deviations in the Agreement as the Commission has already determined that they do not present a risk of undue discrimination. Out of an abundance of caution and pursuant to Sections (b) and of the Commission s Regulations, NBP has included the Agreement in redline and strikeout form (Appendix C), and listed it in Section 4.3 (v.1.0.0) as a service agreement containing nonconforming language (Appendix A). Effective Date and Request for Waiver NBP respectfully requests that the Commission accept the tariff sections listed at Appendix A to become effective June 1, NBP further requests that the Commission grant any waivers necessary to allow for this effective date. Other Filings Which May Affect This Proceeding There are no other filings before the Commission that may significantly affect the changes proposed herein. Contents of Filing In accordance with Section of the Commission s Regulations and Commission Order No. 714, NBP is submitting the following XML filing package, which includes: 14 April 30 Order, at P 13. 6

7 1. This transmittal letter; 2. The Tariff sections (Appendix A); 3. The Tariff sections in redline strikeout format (Appendix B); and 4. The Agreement in redline strikeout format (Appendix C). Certificate of Service As required by Sections 154.7(b) and of the Commission s regulations, copies of this filing are being served on all of NBP s existing customers and interested state regulatory agencies. A copy of this letter, together with the enclosed tariff sheets and other attachments, are available during regular business hours for public inspection at NBP s principal place of business. Pursuant to Section and Section (c) (5), the undersigned has read this filing and knows its contents, and the contents are true as stated, to the best of his knowledge and belief. The undersigned possesses full power and authority to sign such filing. Any questions regarding this filing may be directed to Joan Collins at (832) Respectfully submitted, John A. Roscher Director, Rates & Tariffs North Baja Pipeline, LLC Enclosures 7

8 Appendix A Modified Tariff Sections Section Version Description 1 (v.2.0.0) Table of Contents (v.1.0.0) Negotiated Rate Agreements Rate Schedule FTS (v.1.0.0) Explanatory Footnotes for Negotiated Rates FTS (v.1.0.0) Non-Conforming Service Agreements New Tariff Sections Section Version Description 8.3 (v.0.0.0) Sempra LNG Marketing, LLC FTS-1 Agmt (#A016F4)

9 North Baja Pipeline, LLC PART 1 FERC Gas Tariff TABLE OF CONTENTS First Revised Volume No. 1 Table of Contents v Superseding v TABLE OF CONTENTS Description Section No. Table of Contents... 1 Preliminary Statement... 2 System Map... 3 Statement of Rates FTS-1, ITS-1, PAL-1 Rates and ACA Surcharge Negotiated Rate Agreements Non-Conforming Service Agreements Rate Schedules Firm Transportation Service (FTS-1) Rate Schedule FTS Interruptible Transportation Service (ITS-1) Rate Schedule ITS Parking and Lending Service (PAL-1) Rate Schedule PAL General Terms and Conditions of Service Definitions Quality of Gas Measuring Equipment Measurements Inspection of Equipment and Records Billing Payment Availability of Transportation Open Season Procedures Right of First Refusal Upon Termination of Firm Shipper s Service Agreement ("ROFR") Qualifying for Service Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

10 North Baja Pipeline, LLC PART 1 FERC Gas Tariff TABLE OF CONTENTS First Revised Volume No. 1 Table of Contents v Superseding v Creditworthiness Priority of Service Scheduling and Nominations Curtailment Balancing Market Centers Operational Flow Orders ("OFO") Capacity Release Notice of Changes in Operating Conditions Planned NBP Capacity Curtailments and Interruptions Flexible Receipt and Delivery Points Force Majeure Negotiated Rates Facilities Construction and Interconnection Policy Warranty of Eligibility for Transportation Possession of Gas and Responsibility Indemnification Arbitration Governmental Regulations Waiver of Default Assignability Effect of Headings Complaint Procedures Equality of Transportation Service Electronic Communications Annual Charge Adjustment (ACA) Provision Sales of Excess Gas Discount Policy Gas Industry Standards Informational Postings Rationalization Procedures for LNG Expansion Form of Service Agreement Form of Service Agreement FTS Form of Service Agreement FTS-1 (LAT-1) Form of Service Agreement ITS Form of Service Agreement ITS-1 (LAT-1) Form of Service Agreement PAL Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

11 North Baja Pipeline, LLC PART 1 FERC Gas Tariff TABLE OF CONTENTS First Revised Volume No. 1 Table of Contents v Superseding v Non-conforming Agreements with Negotiated Rates Sempra LNG Marketing Corp. FTS-1 (#A016F2) Sempra LNG Marketing Corp. FTS-1 (#A016F3) Sempra LNG Marketing, LLC FTS-1 (#A016F4) Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

12 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Negotiated Rate Agreements - Rate Schedule FTS-1 v Superseding v STATEMENT OF EFFECTIVE RATES AND CHARGES NEGOTIATED RATE AGREEMENTS UNDER RATE SCHEDULE FTS-1 PRIMARY PRIMARY TERM OF RECEIPT DELIVERY RATE SHIPPER CONTRACT DTH/D POINT POINT /2 Energia Azteca X, 09/01/02 - US-Mexico S. de R.L. de C.V. /1 03/31/28 135,000 Ehrenberg Border /5 Energia de Baja 09/01/02 - US-Mexico California, S. 03/31/28 37,000 Ehrenberg Border /6 S. de R.L. de C.V. /1 Arizona Public 03/01/10 - US-Mexico Yucca Power Service Company /8 02/28/25 66,250 Border at Plant, Yuma, (LAT-1 Service) Yuma, AZ Arizona in the vicinity of County 10 th Street Arizona Public 03/01/10 - US-Mexico Service Company /8 02/28/15 11,000 Ehrenberg Border Sempra LNG 07/01/08 - US-Mexico Marketing Corp. /8 08/31/22 125,000 Ehrenberg Border /4 Sempra LNG 07/01/08 - US-Mexico Marketing Corp. /8 02/14/28 85,000 Border SoCalGas /4 Sempra LNG 06/01/10 - US-Mexico Marketing, LLC /8 02/28/23 105,000 Border SoCalGas /7 Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

13 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Explanatory Footnotes for Negotiated Rates - FTS-1 v Superseding v Explanatory Footnotes for Negotiated Rates Under Rate Schedule FTS-1 1/ This contract does not deviate in any material aspect from the Form of Service Agreement in this Tariff. 2/ Unless otherwise noted, all Shippers pay North Baja Pipeline, LLC's maximum Reservation Charge, Delivery Charge, ACA, and contribute fuel in-kind in accordance with this Tariff. 3/ Reserved 4/ The transportation rate under this Agreement is a negotiated rate consisting of a monthly reservation fee equal to $ times 30.4 days for each month, times the Maximum Daily Quantity, plus a volumetric rate of $ per Dth, plus, fuel, line loss and unaccounted for gas as set forth in the Tariff and any and all applicable surcharges. This rate shall be fixed for the term of this Agreement. 5/ The transportation rate under this Agreement is a negotiated rate consisting of a monthly reservation fee equal to $ times 30.4 days for each month, plus a delivery rate of $ 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 ) Where: NR = OR = 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; 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. Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

14 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Explanatory Footnotes for Negotiated Rates - FTS-1 v Superseding v The Western Zone is defined as 115 degrees, 41 minutes, 21 seconds west longitude, west to the interconnection with Transportadora de Gas Natural de Baja California; The Mexicali Zone is defined as 115 degrees, 41 minutes, 21 seconds, east to 115 degrees, 11 minutes, 50 seconds west longitude; A Third Party Shipper is defined as a shipper that is either the owner, operator, or fuel supplier to electric generation facilities, or affiliates of NBP or GB. (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, 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 $ times 30.4 days for each month, plus a delivery rate of $ 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 ) Where: NR = OR = 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; Shipper's negotiated Original Rate on NBP or $0.105 per Dth on a 100% load factor basis; Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

15 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Explanatory Footnotes for Negotiated Rates - FTS-1 v Superseding v 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. The Western Zone is defined as 115 degrees, 41 minutes, 21 seconds west longitude, west to the interconnection with Transportadora de Gas Natural de Baja California; The Mexicali Zone is defined as 115 degrees, 41 minutes, 21 seconds, east to 115 degrees, 11 minutes, 50 seconds west longitude; A Third Party Shipper is defined as a shipper that is either the owner, operator, or fuel supplier to electric generation facilities, or affiliates of NBP or GB. (2) 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. (3) This provision terminates December 31, 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. 7/ The transportation rate under this Agreement is a negotiated rate consisting of a monthly reservation fee equal to $ plus a Reverse Flow Facilities Surcharge of $ for a total of $ times 30.4 days for each month, times the Maximum Daily Quantity, plus a volumetric rate of $ per Dth plus fuel, line loss and unaccounted for gas as set forth in the Tariff and any and all applicable surcharges. This rate shall be fixed for the term of this Agreement. 8/ This contract contains terms that materially deviate from the Form of Service Agreement in this Tariff. This contract has been filed with the FERC. Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

16 North Baja Pipeline, LLC PART 4.3 FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Non-Conforming Service Agreements v Superseding v NON-CONFORMING SERVICE AGREEMENTS PURSUANT TO (b) Rate Agreement Effective Name of Shipper/Contract No. Schedule Date Date Gazprom Marketing & Trading FTS-1 9/12/09 9/12/09 USA, Inc. #A025F1 Arizona Public Service Company FTS-1 9/21/09 3/1/10 #A027F1 Arizona Public Service Company ITS-1 9/21/09 3/1/10 #A027I1 Arizona Public Service Company FTS-1 (LAT-1) 9/21/09 3/1/10 #YA027F1 Sempra LNG Marketing, LLC FTS-1 5/17/10 6/1/10 #A016F4 Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

17 North Baja Pipeline, LLC PART 8.3 FERC NGA Gas Tariff Non-conforming Agmt with Neg Rate First Revised Volume No. 1 Sempra LNG Marketing, LLC FTS-1 Agmt (#A016F4) v Firm Transportation Service Agreement Rate Schedule FTS-1 Sempra LNG Marketing, LLC (#A016F4) Agreement Effective Date: June 1, 2010 Issued: June 1, 2010 (Option Code A) Effective: June 1, 2010

18

19

20

21

22 A016F4 Attention: President Phone: Fax: With a copy to: SEMPRA LNG 101 Ash Street San Diego, CA Attention: Chief Counsel Phone: Fax: Unless changed, the addresses for the parties for routine communications, including monthly statements and payments are as follows: Transporter: "NORTH BAJA PIPELINE, LLC" 717 Texas Street, Suite 2400 Houston, TX Attention: Accounting Shipper: SEMPRA LNG MARKETING, LLC 101 Ash Street San Diego, CA Attention: President Phone: Fax: With a copy to: SEMPRA LNG 101 Ash Street San Diego, CA Phone Fax: All waivers shall be in writing, and such waiver by either party of any one or more defaults by the other hereunder shall not operate as a waiver of any future default or defaults, whether of a like or of a different character. This Agreement may only be amended by an instrument in writing executed by both parties hereto. In no event shall this Agreement be modified by course of performance, course of dealing or usage of trade.

23

24

25

26

27 Appendix B

28 North Baja Pipeline, LLC PART 1 FERC Gas Tariff TABLE OF CONTENTS First Revised Volume No. 1 Table of Contents v Superseding v TABLE OF CONTENTS Description Section No. Table of Contents... 1 Preliminary Statement... 2 System Map... 3 Statement of Rates FTS-1, ITS-1, PAL-1 Rates and ACA Surcharge Negotiated Rate Agreements Non-Conforming Service Agreements Rate Schedules Firm Transportation Service (FTS-1) Rate Schedule FTS Interruptible Transportation Service (ITS-1) Rate Schedule ITS Parking and Lending Service (PAL-1) Rate Schedule PAL General Terms and Conditions of Service Definitions Quality of Gas Measuring Equipment Measurements Inspection of Equipment and Records Billing Payment Availability of Transportation Open Season Procedures Right of First Refusal Upon Termination of Firm Shipper s Service Agreement ("ROFR") Qualifying for Service Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

29 North Baja Pipeline, LLC PART 1 FERC Gas Tariff TABLE OF CONTENTS First Revised Volume No. 1 Table of Contents v Superseding v Creditworthiness Priority of Service Scheduling and Nominations Curtailment Balancing Market Centers Operational Flow Orders ("OFO") Capacity Release Notice of Changes in Operating Conditions Planned NBP Capacity Curtailments and Interruptions Flexible Receipt and Delivery Points Force Majeure Negotiated Rates Facilities Construction and Interconnection Policy Warranty of Eligibility for Transportation Possession of Gas and Responsibility Indemnification Arbitration Governmental Regulations Waiver of Default Assignability Effect of Headings Complaint Procedures Equality of Transportation Service Electronic Communications Annual Charge Adjustment (ACA) Provision Sales of Excess Gas Discount Policy Gas Industry Standards Informational Postings Rationalization Procedures for LNG Expansion Form of Service Agreement Form of Service Agreement FTS Form of Service Agreement FTS-1 (LAT-1) Form of Service Agreement ITS Form of Service Agreement ITS-1 (LAT-1) Form of Service Agreement PAL Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

30 North Baja Pipeline, LLC PART 1 FERC Gas Tariff TABLE OF CONTENTS First Revised Volume No. 1 Table of Contents v Superseding v Non-conforming Agreements with Negotiated Rates Sempra LNG Marketing Corp. FTS-1 (#A016F2) Sempra LNG Marketing Corp. FTS-1 (#A016F3) Sempra LNG Marketing, LLC FTS-1 (#A016F4) Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

31 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Negotiated Rate Agreements - Rate Schedule FTS-1 v Superseding v STATEMENT OF EFFECTIVE RATES AND CHARGES NEGOTIATED RATE AGREEMENTS UNDER RATE SCHEDULE FTS-1 PRIMARY PRIMARY TERM OF RECEIPT DELIVERY RATE SHIPPER CONTRACT DTH/D POINT POINT /2 Gasoducto Rosarito 09/01/02 - US-Mexico S.De R.L. De. C.V. /1 12/31/09 98,000 /3 Ehrenberg Border /3 09/01/02 - US-Mexico MGI Supply Ltd /8 08/31/22 32,000 /4 Ehrenberg Border /4 Energia Azteca X, 09/01/02 - US-Mexico S. de R.L. de C.V. /1 03/31/28 135,000 Ehrenberg Border /5 Energia de Baja 09/01/02 - US-Mexico California, S. 03/31/28 37,000 Ehrenberg Border /6 S. de R.L. de C.V. /1 Termoelectrica de 01/01/03 - US-Mexico Mexicali, S. de 12/31/23 30,000 /7 Ehrenberg Border /7 R.L. de C.V. /1 Arizona Public 03/01/10 - US-Mexico Yucca Power Service Company /8 02/28/25 66,250 Border at Plant, Yuma, (LAT-1 Service) Yuma, AZ Arizona in the vicinity of County 10 th Street Arizona Public 03/01/10 - US-Mexico Service Company /8 02/28/15 11,000 Ehrenberg Border Sempra LNG 07/01/08 - US-Mexico Marketing Corp. /8 08/31/22 125,000 Ehrenberg Border /4 Sempra LNG 07/01/08 - US-Mexico Marketing Corp. /8 02/14/28 85,000 Border SoCalGas /4 Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

32 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Negotiated Rate Agreements - Rate Schedule FTS-1 v Superseding v Sempra LNG 06/01/10 - US-Mexico Marketing, LLC /8 02/28/23 105,000 Border SoCalGas /7 Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

33 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Explanatory Footnotes for Negotiated Rates - FTS-1 v Superseding v Explanatory Footnotes for Negotiated Rates Under Rate Schedule FTS-1 1/ This contract does not deviate in any material aspect from the Form of Service Agreement in this Tariff. 2/ Unless otherwise noted, all Shippers pay North Baja Pipeline, LLC's maximum Reservation Charge, Delivery Charge, ACA, and contribute fuel in-kind in accordance with this Tariff. 3/ ReservedThe transportation rate under this Agreement is a negotiated rate consisting of a monthly reservation fee equal to $ times 30.4 days for each month, plus a volumetric rate of $ per Dth, plus ACA, plus an allowance for fuel, line loss and unaccounted for gas as set forth in the Tariff. This rate shall be fixed for the term of this Agreement. The Maximum Daily Quantities will vary over the term of this Agreement as follows: MDQ Dth/d 09/01/02-12/31/02 98,000 01/01/03-12/31/03 63,000 01/01/04-12/31/04 71,000 01/01/05-12/31/05 74,000 01/01/06-12/31/06 77,000 01/01/07-12/31/07 80,000 01/01/08-12/31/08 83,000 01/01/09-12/31/09 85,000 4/ The transportation rate under this Agreement is a negotiated rate consisting of a monthly reservation fee equal to $ times 30.4 days for each month, times the Maximum Daily Quantity, plus a volumetric rate of $ per Dth, plus, ACA, plus an allowance for fuel, line loss and unaccounted for gas as set forth in the Tariff and any and all applicable surcharges. This rate shall be fixed for the term of this Agreement. The Maximum Daily Quantities will vary over the term of this Agreement as follows: MDQ Dth/d 09/01/02-12/31/02 32,000 01/01/03-12/31/03 67,000 01/01/04-12/31/04 99,000 01/01/05-12/31/05 96,000 01/01/06-12/31/06 133,000 01/01/07-12/31/07 130,000 01/01/08-12/31/08 127,000 01/01/09-12/31/09 125,000 01/01/10-08/31/22 210,000 Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

34 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Explanatory Footnotes for Negotiated Rates - FTS-1 v Superseding v / The transportation rate under this Agreement is a negotiated rate consisting of a monthly reservation fee equal to $ times 30.4 days for each month, plus a delivery rate of $ 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 ) Where: NR = OR = 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; 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. The Western Zone is defined as 115 degrees, 41 minutes, 21 seconds west longitude, west to the interconnection with Transportadora de Gas Natural de Baja California; The Mexicali Zone is defined as 115 degrees, 41 minutes, 21 seconds, east to 115 degrees, 11 minutes, 50 seconds west longitude; A Third Party Shipper is defined as a shipper that is either the owner, operator, or fuel supplier to electric generation facilities, or affiliates of NBP or GB. (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. Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

35 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Explanatory Footnotes for Negotiated Rates - FTS-1 v Superseding v (4) This provision terminates December 31, 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 $ times 30.4 days for each month, plus a delivery rate of $ 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 ) Where: NR = OR = 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; 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. The Western Zone is defined as 115 degrees, 41 minutes, 21 seconds west longitude, west to the interconnection with Transportadora de Gas Natural de Baja California; The Mexicali Zone is defined as 115 degrees, 41 minutes, 21 seconds, east to 115 degrees, 11 minutes, 50 seconds west longitude; A Third Party Shipper is defined as a shipper that is either the owner, operator, or fuel supplier to electric generation facilities, or affiliates of NBP or GB. (2) 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. Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

36 North Baja Pipeline, LLC PART FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Explanatory Footnotes for Negotiated Rates - FTS-1 v Superseding v (3) This provision terminates December 31, 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. 7/ The transportation rate under this Agreement is a negotiated rate consisting of a monthly reservation fee equal to $ plus a Reverse Flow Facilities Surcharge of $ for a total of $ times 30.4 days for each month, times the then current Maximum Daily Quantity, plus a volumetric rate of $ per Dth plus fuel, line loss and unaccounted for gas as set forth in the Tariff and any and all applicable surcharges. This rate shall be fixed for the term of this Agreement. The Maximum Daily Quantities will vary over the term of this Agreement as follows: MDQ Dth/d 01/01/03-02/28/03 30,000 03/01/03-03/31/03 45,000 04/01/03-04/30/03 85,000 05/01/03-12/31/23 105,000 8/ This contract contains terms that materially deviate from the Form of Service Agreement in this Tariff. This contract has been filed with the FERC. Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

37 North Baja Pipeline, LLC PART 4.3 FERC Gas Tariff Statement of Rates First Revised Volume No. 1 Non-Conforming Service Agreements v Superseding v NON-CONFORMING SERVICE AGREEMENTS PURSUANT TO (b) Rate Agreement Effective Name of Shipper/Contract No. Schedule Date Date Gazprom Marketing & Trading FTS-1 9/12/09 9/12/09 USA, Inc. #A025F1 Arizona Public Service Company FTS-1 9/21/09 3/1/10 #A027F1 Arizona Public Service Company ITS-1 9/21/09 3/1/10 #A027I1 Arizona Public Service Company FTS-1 (LAT-1) 9/21/09 3/1/10 #YA027F1 Sempra LNG Marketing, LLC FTS-1 5/17/10 6/1/10 #A016F4 Issued: June 1, 2010 Effective: June 1, 2010 Docket No. Accepted:

38 Appendix C

39 FORM OFFIRM TRANSPORTATION SERVICE AGREEMENT - FIRM TRANSPORTATION FORM OF SERVICE AGREEMENT BETWEEN APPLICABLE TO FIRM TRANSPORTATION SERVICE OFFERED BY NORTH BAJA PIPELINE, LLC AND SEMPRA LNG MARKETING, LLC UNDER RATE SCHEDULE FTS-1 THIS AGREEMENT is made and entered into this --- day of, 20,May, 2010, by and between North Baja Pipeline, LLC, a Delaware Limited Liability Company (hereinafter referred to as "NBP"), and, a corporation existing under the laws of the State or Province of Sempra LNG Marketing, LLC (formerly known as Sempra Energy LNG Marketing Corp.), (hereinafter referred to as "Shipper"), on behalf of (hereinafter referred to as ). WHEREAS, NBP owns and operates a bi-directional natural gas pipeline transmission system which extends from a point of interconnection with the pipeline facilities of El Paso Natural Gas Company, near Ehrenberg, Arizona, through the states of Arizona and California and terminating at a point of interconnection with Gasoducto Bajanorte at the International Boundary with Mexico, west of Yuma, Arizona; and WHEREAS, Shipper desires NBP, on a firm basis, to transport certain quantities of natural gas from to an interconnection with the facilities of Gasoducto Bajanorte S. de R.L. de C.V. at the international border between Yuma, Arizona and Mexicali, North Baja Mexico to an interconnection with the facilities of Southern California Gas Company ( SoCal Gas ) near Blythe, California; and WHEREAS, Shipper is the recipient of released capacity from Termoelectrica de Mexicali, S. de R.L. de C. V., as part of a pre-arranged Capacity Release agreement approved by the FERC in an order issued June 20, 2005: and WHEREAS, NBP is willing to transport certain quantities of natural gas for Shipper, on a firm basis, NOW, THEREFORE, the parties agree as follows: I Governmental Authority 1.1 This Firm Transportation Agreement ("Agreement") is made pursuant to the regulations of the Federal Energy Regulatory Commission (FERC) contained in 18 CFR Part 284, as amended from time to time.

40 1.2 This Agreement is subject to all valid legislation with respect to the subject matters hereof, either state or federal, and to all valid present and future decisions, orders, rules, regulations and ordinances of all duly constituted governmental authorities having jurisdiction. (Continued) FORM OF SERVICE AGREEMENT - FIRM TRANSPORTATION (Continued)

41 1.3 Shipper shall reimburse NBP for any and all filing fees incurred by NBP specific to Shipper in seeking governmental authorization for the initiation of any new service or extension, or termination of service under this Agreement and Rate Schedule FTS-1. Shipper shall reimburse NBP for such fees at NBP's designated office within ten (10) days of receipt of notice from NBP that such fees are due and payable. Additionally, Shipper shall reimburse NBP for any and all penalty fees or fines assessed NBP caused by the negligence of Shipper in not obtaining all proper domestic and Mexican import/export licenses, surety bonds or any other documents and approvals related to the domestic exportation and subsequent Mexican importation of natural gas transported by NBP hereunder. II Quantity of Gas and Priority of Service 2.1 Subject to the terms and provisions of this Agreement and NBP's General Terms and Conditions of Service applicable to Rate Schedule FTS-1, daily receipts of gas by NBP from Shipper at the point(s) of receipt shall be equal to daily Deliveries of gas by NBP to Shipper at the point(s) of delivery; provided, however, Shipper shall deliver to NBP an additional quantity of natural gas at the point(s) of receipt as compressor station fuel, line loss and unaccounted for gas as specified in NBP's FERC Gas Tariff. Any limitations of the quantities to be received from each point of receipt and/or delivered to each point of delivery shall be as specified on the Exhibit A attached hereto. 2.2 The maximum quantities of gas to be delivered by NBP for Shipper's account at the point(s) of delivery are set forth in Exhibit A. 2.3 In providing service to its existing or new customers, NBP will use the priorities of service specified in Paragraph 13 of NBP's General Terms and Conditions of Service on file with the FERC. 2.4 Prior to initiation of service, Shipper shall provide NBP with any information required by the FERC, as well as all information identified in NBP's General Terms and Conditions of Service applicable to Rate Schedule FTS-1. (Continued) FORM OF SERVICE AGREEMENT - FIRM TRANSPORTATION (Continued) III Term of Agreement 3.1 This Agreement shall become effective upon execution. Service shall commence on June 1, 2010, and, and shall continue in full force and effect until until February 28, 2023, and thereafter as may be extended in accordance with Exhibit B. Thereafter, this Agreement shall continue in full force and effect for an additional term of unless gives at least prior written notice of its desire to terminate this Agreement. Under this

42 evergreen provision, parties capable of giving notice of termination may include only Shipper (unilateral evergreen) or may include both Shipper and NBP (bilateral evergreen).

43 IV Points of Receipt and Delivery 4.1 The point(s) of receipt of gas deliveries to NBP is as designated in Exhibit A, attached hereto. 4.2 The point(s) of delivery of gas to Shipper is as designated in Exhibit A, attached hereto. 4.3 Unless otherwise agreed, Shipper shall deliver or cause to be delivered to NBP the gas to be transported hereunder at pressures sufficient to deliver such gas into NBP's system at the point(s) of receipt. Unless otherwise agreed, NBP shall deliver the gas to be transported hereunder to or for the account of Shipper at the pressures existing in NBP's system at the point(s) of deliveryprevented from doing so because of conditions existing on a pipeline upstream of the facilities of NBP that are beyond NBP s responsibility and that cause a material deviation from the design assumptions for receipt of gas by NBP as reflected in NBP s filing with FERC for approval to construct and operate facilities under section 7(c) of the Natural Gas Act, NBP shall deliver gas to Shipper at the interconnection with SoCal Gas at the pressure, given the design of the SoCal Gas system at the time of NBP s certificate application, sufficient to allow full delivery of Shipper s MDQ into the SoCal Gas system. V Operating Procedure 5.1 Shipper shall conform to the operating procedures set forth in NBP's General Terms and Conditions of Service. 5.2 NBP shall have the right to interrupt or curtail the transport of gas for the account of Shipper pursuant to NBP's General Terms and Conditions of Service applicable to Rate schedule FTS-1. VI Rate(s), Rate Schedules, and General Terms and Conditions of Service 6.1 Shipper shall pay NBP each month for services rendered pursuant to this Agreement in accordance with NBP's Rate Schedule FTS-1, or superseding rate schedule(s), on file with and subject to the jurisdiction of FERC. (Continued) FORM OF SERVICE AGREEMENT - FIRM TRANSPORTATION (Continued) In the event NBP and Shipper agree on a Negotiated Rate, that rate, and any provisions governing such Negotiated Rate, shall be set forth in Exhibit B attached hereto.

44 6.2 Shipper shall compensate NBP each month for compressor station fuel, line loss and other unaccounted for gas associated with this transportation service provided herein in accordance with NBP's Rate Schedule FTS-1, or superseding rate schedule(s), on file with and subject to the jurisdiction of FERC. 6.3 This Agreement in all respects shall be and remains subject to the applicable provisions of Rate Schedule FTS-1, or superseding rate schedule(s) and to the applicable General Terms and Conditions of Service of NBP's FERC Gas Tariff on file with the FERC, all of which are by this reference made a part hereof. 6.4 NBP shall have the unilateral right from time to time to propose and file with FERC such changes in the rates and charges applicable to transportation services pursuant to this Agreement, the rate schedule(s) under which this service is hereunder provided, or any provisions of NBP's General Terms and Conditions of Service applicable to such services. Shipper shall have the right to protest any such changes proposed by NBP and to exercise any other rights that Shipper may have with respect thereto. Notwithstanding the foregoing, NBP and Shipper agree not to initiate any proceeding before the FERC with respect to an increase or decrease in any negotiated rate set forth in Exhibit B hereto during the primary term. VII Miscellaneous 7.1 This Agreement shall be interpreted according to the laws of the State of California. 7.2 Shipper warrants that upstream and downstream transportation arrangements are in place, or will be in place as of the requested effective date of service, and that it has advised the upstream and downstream transporters of the receipt and delivery points under this Agreement and any quantity limitations for each point as specified on Exhibit A attached hereto. 7.3 Shipper agrees to indemnify and hold NBP harmless for refusal to transport gas hereunder in the event any upstream or downstream transporter fails to receive or deliver gas as contemplated by this Agreement. (Continued) FORM OF SERVICE AGREEMENT - FIRM TRANSPORTATION (Continued) 7.4 Unless herein provided to the contrary, any notice called for in this Agreement shall be in writing and shall be considered as having been given if delivered by registered mail with all postage or charges prepaid, to either NBP or Shipper at the place designated below. Routine communications, including monthly statements and payment, shall be considered as duly delivered when received by ordinary mail, facsimile or (return notification received). Unless changed, the addresses of the parties for legal notices are as follows: Transporter: