Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 01/01/2005, Docket: RP00-476-006, Status: Effective

Twelfth Revised Sheet No. 126 Twelfth Revised Sheet No. 126 : Effective

Superseding: Eleventh Revised Sheet No. 126

GENERAL TERMS AND CONDITIONS

(Continued)

Section 12.1 (continued)

(g) Predetermined Priorities: On the nomination form, the service requester shall provide a predetermined

balancing priority for all of the Delivery Points and associated volumes nominated under the

transportation Service Agreement to be used by COMPANY to limit the deliveries under the Service

Agreement in the event of an interruption or reduction in SHIPPER'S receipts of gas under said

agreement. On the nomination form, the service requester shall also provide a predetermined priority

for all of the Receipt Points and/or Supply Pools serving SHIPPER'S transportation Service Agreement

to be used by COMPANY to limit the receipts of gas under the Service Agreement in the event of an

interruption or reduction in the deliveries under said agreement.

(h) Volumetric Capacity Release Nominations or recalls on an intraday cycle:

On its nomination form for a Firm Transportation Service Agreement, SHIPPER must indicate the offer

number for each nomination of volumetric capacity release or a release that is recallable on an

intraday nomination cycle so that COMPANY can track and calculate the appropriate credit to the

Releasing Shipper.

(i) FT-NN and FT-Small Shipper Nominations: If SHIPPER chooses to utilize its FT-NN or its FT-SS

capacity on a nominated basis under its Firm Transportation Service Agreement, it must indicate such

use on its nomination form to allow COMPANY to appropriately schedule SHIPPER'S FT-NN or its FT-SS

capacity.

(j) Package ID: A Package ID is a way to differentiate between discrete business transactions. Use of

the Package ID is at the discretion of the service requester, and if sent, will be accepted and

processed by COMPANY. When used, Package IDs shall be supported for nominating, scheduling,

and allocating, but not for transportation invoicing, unless mutually agreeable.

(k) Posting of Capacity Constraints Affecting Nominations: On a day when COMPANY anticipates that

requests for capacity for the following day of service will exceed the capacity of its facilities,

COMPANY shall post on SoNet Premier's Bulletin Board by 7:00 a.m. on the day preceding the day on

which service will commence the available capacity on the segments of its pipeline

system which COMPANY anticipates will be affected.

(l)(1) Segmenting of Capacity: SHIPPER may segment its own firm transportation capacity through the

nomination process or as part of a capacity release under Section 22 below to the extent operationally feasible.

Segmentation of firm capacity shall be deemed to be operationally feasible provided that the capacity being

segmented is within the rate zone(s) for which the SHIPPER has contracted for firm service and (i) COMPANY can

verify with reasonable certainty from Shipper's nominations the capacity of the system that SHIPPER is

segmenting; and (ii) to the extent SHIPPER is segmenting its capacity within a reticulated segment on COMPANY's

system, as set forth above on Sheet No. 5B, the projected operational conditions on the system at the time of

the nomination during the effective period of the transaction support the feasibility of scheduling the

segmented transaction as determined by the criteria set forth below in Section 12.1(l)(2). COMPANY will evaluate

whether or not a segmented transaction is operationally feasible during the scheduling process of each

nomination cycle for which the segmented transaction has been nominated. The reticulated area on COMPANY'S

system shall be defined as those portions of the system in which the physical flow of gas is likely to be

controlled or directed in various directions during the course of the gas day in order for Company to provide

firm service under Rate Schedules FT, CSS and FT-NN. In addition, a segmented transaction will be deemed to be

operationally feasible if SHIPPER is segmenting its capacity by zone such that the sum of all nominations by the

original shipper or a combination of Releasing and Acquiring Shippers within a rate zone does not exceed the

Transportation Demand of the Service Agreement, including any Capacity Release Transaction, under which the

nominated service is provided. Unless SHIPPER is segmenting its capacity by zone as provided above, a Shipper

will be considered to have overlapped its capacity if SHIPPER seeks to segment capacity from the north main

system to the south main system or vice versa; and any such segmenting which crosses between the two main line

systems shall not be deemed to be operationally feasible, except that (a) a zone 0 specific pool can be used to

supply a north or south system segmented transaction to a delivery point in a downstream zone, or (b) receipts

from CSS or ISS can be used by nominating such storage withdrawals into a zone 1 north specific pool or a zone 1

south specific pool. COMPANY shall provide on SoNet Premier a list of all delivery and receipt points on the

north main system, the south main system and the reticulated areas of the system.