Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 04/01/2001, Docket: RP01-242-000, Status: Effective

Original Sheet No. 95G Original Sheet No. 95G : Effective

RATE SCHEDULE PAL

PARK AND LOAN SERVICES (continued)

7. PENALTIES

7.1 Park Service:

(a) In the event any of the following occurs, parked

quantities shall become the property of COMPANY at

no cost to COMPANY, free and clear of any adverse

claims:

(i) COMPANY's prevailing operations require

COMPANY to notify SHIPPER that deliveries of

parked quantities must be suspended or be

reduced, and SHIPPER fails to comply with

such notification; and/or

(ii) COMPANY's prevailing operations require

COMPANY to notify SHIPPER that all or part of

SHIPPER's parked quantities must be removed,

and SHIPPER fails to comply within the

specified time frame; and/or

(iii) the PAL account reflects a positive balance

at the termination date of the executed PAL

Agreement and COMPANY and SHIPPER have not

otherwise agreed to extend the termination

date; and/or

(iv) SHIPPER does not comply with the terms of the

parked transaction.

(b) If, pursuant to Section 7.1(a)(i), COMPANY notifies

SHIPPER that deliveries of parked quantities must

be suspended or be reduced, only those quantities

parked in violation of the notification shall

become the property of COMPANY at no cost to

COMPANY, free and clear of any adverse claims.