Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 09/01/2005, Docket: RP05-390-000, Status: Effective

Fourth Revised Sheet No. 134 Fourth Revised Sheet No. 134 : Effective

Superseding: Third Revised Sheet No. 134

GENERAL TERMS AND CONDITIONS

(Continued)

Section 13.1(d) (continued)

which recognizes SHIPPER'S nomination. In the event COMPANY

does not receive a predetermined allocation statement, or revised

predetermined allocation statement, for a Receipt Point in a timely

manner, each SHIPPER agrees that COMPANY shall be authorized

to allocate gas supplies at that Receipt Point based on a Pro Rata

PDA until COMPANY receives a predetermined allocation statement

pursuant to the above procedures which revises the Pro Rata

PDA allocation on a prospective basis.

(e) SHIPPER hereby agrees that COMPANY shall have the right to rely

conclusively on the foregoing predetermined allocations for the

purposes of determining the daily quantities of gas received by

COMPANY for the account of SHIPPER at each Receipt Point.

13.2 Delivery Point Allocation:

(a) Use of PDAs: On a daily basis at each Delivery Point, COMPANY shall

allocate the quantities of gas metered at the point among the quantities

of gas scheduled at the point for the account of its SHIPPERS based on

the Pro Rata PDA method unless another PDA method is provided by the

party that owns or operates the downstream facilities interconnecting

with COMPANY'S facilities at each Delivery Point (the "downstream

operator"). The alternative PDA methodologies from which the downstream

operator may choose include the Swing PDA, a Ranked PDA, a Percentage

PDA, an OPV PDA, or any other mutually agreeable allocation methodology.

A new allocation detail may be needed when a nomination changes. The PDA

shall be provided by the downstream operator on a line item basis at the

level of nomination detail provided by COMPANY for confirmation. COMPANY

shall then use the predetermined priority provided by SHIPPER in its

nomination for applying the PDA to the Package ID level within the line

item nomination level. SHIPPER agrees that COMPANY shall have the right

to rely conclusively on the PDA provided pursuant to this Section 13.2

for the purposes of determining the daily quantities of gas delivered by

COMPANY for the account of SHIPPER at each Delivery Point. The

downstream operator providing an OPV PDA, will also designate the Service

Agreement to be used to handle any variance between the total quantity

entered for allocation at the point under the OPV PDA methodology and the

total quantity measured at the point on a day. Downstream operators

should communicate to the other shippers that their transaction(s) for

allocation purposes are lowest ranked or swing, when such shippers'

transaction(s) are identified by the downstream operator in the PDA

statement submitted to COMPANY as being lowest ranked or swing.