Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 04/01/2001, Docket: RP01-242-001, Status: Effective

Substitute Original Sheet No. 95G.01 Substitute Original Sheet No. 95G.01 : Effective

Superseding: Original Sheet No. 95G.01

RATE SCHEDULE PAL

PARK AND LOAN SERVICES (continued)

7.1 Park Service (continued)

(c) In the event the operational conditions on COMPANY's system

permit, COMPANY, at its option, may forego its rights under

Section 7.1(a)(iii) above provided that SHIPPER agrees to

implement a new PAL transaction at a new negotiated rate(s) for

a period specified by COMPANY. COMPANY's agreement to enter

into a new transaction for a new period as provided above shall

not forego COMPANY's rights under this section at the

termination date of the new PAL transaction.

(d) In the event that a PAL account for Park Service reflects a

negative balance at the termination date of the executed PAL

Agreement, those overdrawn quantities shall be sold to SHIPPER

at 150% of the highest weekly index price per dth, as provided

in Section 7.2(a) below, during the term of the transaction.

7.2 Loan Service

(a) In the event any of the following occurs, loaned quantities

shall be sold to SHIPPER at 150% of the highest weekly index

price per dth established under Natural Gas Intelligence's

Average Weekly Price Index, Southern Natural - Louisiana,

during the term of the agreed upon transaction:

(i) COMPANY's prevailing operations require COMPANY to notify

SHIPPER that receipt of SHIPPER's loaned quantities must

be suspended or be reduced, and SHIPPER continues to

nominate loaned quantities; and/or