Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 03/01/2005, Docket: RP04-523-000, Status: Effective

Ninth Revised Sheet No. 136 Ninth Revised Sheet No. 136 : Effective

Superseding: Eighth Revised Sheet No. 136

GENERAL TERMS AND CONDITIONS

(Continued)

Section 13.2(e) (continued)

(e) Pipeline Interconnects: The predetermined allocation statement for Delivery

Points interconnecting with third-party pipelines shall be provided by the third-

party pipeline and shall be one of the PDA methods enumerated in Section 13.2(b)

above or Section 13.3 below. In the event there is a conflict between the foregoing

methodologies and the third-party pipeline's provisions in its FERC Gas Tariff

governing the allocations of gas, said pipeline company and COMPANY shall mutually

agree on the predetermined allocation methodology to be used.

(f) Maximization: To better maximize the use of SHIPPER'S firm transportation

services for which it is paying a Reservation Charge, as well as the use of FT-NN

service on a no-notice basis, COMPANY shall maximize SHIPPER'S services as follows prior to billing

SHIPPER under its Service Agreements with COMPANY. In the event a Service Agreement contains a

Negotiated Rate transaction, such Service Agreement shall not be subject to maximization as provided

below, unless SHIPPER and COMPANY otherwise agree in the Negotiated Rate Exhibit on the method for

prioritizing the Negotiated Rate Service Agreement in the maximization process.

(i) Delivery Point Level: The total quantity allocated to SHIPPER at each Delivery Point (or

aggregate Delivery Points) pursuant to the PDA in effect for the day shall be deemed to be

allocated among SHIPPER'S various services in effect at each point on that day in the following

order, as applicable: Reservation FT and acquired FT capacity released on a reservation basis

("Standard Firm"), Reservation FT-NN and acquired FT-NN capacity released on a reservation basis

("Standard FT-NN"),Small Shipper FT and Small Shipper FT-NN, acquired capacity release charged

on a volumetric basis(allocated up to the scheduled quantity in the order provided by SHIPPER

through the predetermined priorities of its nomination), IT, then overrun. It is provided,

however, that the allocation of any deliveries at a Delivery Point for a segmented transaction

within a zone will be capped at the lesser of the applicable allocated deliveries or receipts.

(ii) Zone Level: For SHIPPER'S final billing purposes, the following reallocation

shall occur, as applicable, within each rate zone. The total Delivery Point quantities

allocated to SHIPPER'S Reservation FT and acquired FT capacity released on a reservation basis

("Standard Firm"), Reservation FTNN and acquired FT-NN capacity released on a reservation basis

("Standard FT-NN"), IT service, and overrun, pursuant to Section 13.2(f)(i) above, shall be

reallocated within the rate zone to the following service types (up to SHIPPER'S total

Transportation Demands for each service type within that rate zone): Reservation FT and

acquired FT capacity released on a reservation basis ("Standard Firm"), Reservation FTNN and

acquired FT-NN capacity released on a reservation basis ("Standard FT-NN"). SHIPPER'S total

quantities allocated to Small Shipper FT and/or FTNN service shall remain the same at the zone

level. SHIPPER'S quantities allocated to each acquired volumetric capacity release at the

Delivery Points within the zone shall remain the same at the zone level. Overrun quantities

allocated to SHIPPER's capacity that has been segmented within the zone shall remain the same at

the zone level and will not be reallocated. Any remaining quantities allocated to SHIPPER

within the zone shall first be allocated to IT service, not to exceed the total IT quantity

allocated to SHIPPER at the Delivery Points within the zone, and then as overrun gas charged at

the maximum rate set forth on the currently effective Sheet Nos. 18 or 30 of this Tariff

applicable to the zone of delivery.