Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 10/01/1996, Docket: RP96-404-000, Status: Effective

Fourth Revised Sheet No. 138 Fourth Revised Sheet No. 138 : Effective

Superseding: Third Revised Sheet No. 138

GENERAL TERMS AND CONDITIONS

(Continued)

Section 13.2(b)(ii)(A)

allocated to the downstream operator's FT-NN Service

Agreement, up to the maximum quantity of gas eligible

for injection on a no-notice basis under said Service

Agreement, and shall be deemed to have been injected

into the downstream operator's Storage Inventory.

(B) The measured quantities of gas shall then be allocated

to scheduled Service Agreements in the following order:

(1) the quantities of gas scheduled under

transportation Service Agreements with third

parties, on a pro rata basis based on scheduled

nominations;

(2) the quantities of gas scheduled under

transportation Service Agreements with the

downstream operator, on a pro rata basis based

on scheduled nominations.

(iii) For a SHIPPER that has Service Agreements for both firm and

interruptible services, the total quantities allocated to said

Service Agreements shall be reallocated by increasing the

quantities allocated to the Service Agreement(s) for firm

service, not to exceed the total Transportation Demand under

said Service Agreement(s); provided, however, that such

reallocation shall not be made to any firm transportation

capacity release agreement which is not subject to

payment on a Reservation Charge basis.

(iv) For a SHIPPER that has an FT-NN Service Agreement subject to

a Reservation Charge and an FT-NN Service Agreement subject to

the Small Shipper Charge, the total quantities of gas

allocated to said FT-NN Service Agreements under Section

13.2(b)(i)(B) above shall be reallocated by increasing

the quantities allocated to the FT-NN Service Agreement

subject to a Reservation Charge up to the Transportation

Demand under said Service Agreement.

(v) For purposes of Section 13.2(b)(i) and (ii) above, if a SHIPPER

has quantities scheduled under an FT-NN Service Agreement on a

day when it has unutilized firm contract demand remaining on either

an FT Service Agreement or capacity release agreement, then the

quantities of gas allocated to said FT-NN Service Agreement(s)

shall be reallocated to said FT or capacity release Service

Agreement up to that Agreement's unutilized Transportation

Demand; provided that the FT or capacity release Service Agreement

to which the FT-NN volume is reallocated must have the same rate

structure, i.e. Small Shipper or Reservation Charge, as the

FT-NN Service Agreement being reallocated. This reallocation

shall occur prior to allocating no-notice volumes to SHIPPER'S

FT-NN Service Agreement(s) above.