Southern Natural Gas Company

Seventh Revised Volume No. 1

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

Second Revised Sheet No. 126.02 Second Revised Sheet No. 126.02 : Effective

Superseding: First Revised Sheet No. 126.02

GENERAL TERMS AND CONDITIONS

(Continued)

Section 12.1(l)(continued)

(3) Segmentable Capacity: The maximum quantity of gas that may

be nominated on each segmented portion, or overlapping

segmented portions, of COMPANY'S pipeline system by the

original shipper or a combination of the Releasing and

Acquiring Shipper(s) shall not exceed the Transportation

Demand of the Service Agreement, including any Capacity

Release Transaction, under which the nominated service is

provided. For purposes of determining whether a segment has

been overlapped, nominations to the same Receipt or Delivery

Point via a forward haul and backward haul, which do not

overlap on the pipeline segment, shall not be considered to

overlap at the Receipt or Delivery Point. The volumetric

rates, fuel retention percentages and charges, including any

overrun charges if contract quantity rights are exceeded

because of an overlap or other allocation of volumes in excess

of contract quantity, shall apply to the total quantity of gas

transported on each segment of the capacity. Once SHIPPER has

segmented its capacity, either for its own use or under a

capacity release, the upstream segment(s) shall be entitled to

all alternate points within that zone, subject to the

availability of capacity, and the downstream segment(s) shall

be entitled to all alternate points within the zone for the

downstream segment, subject to the availability of capacity.