Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 07/01/2003, Docket: RP03-381-000, Status: Effective

Fifth Revised Sheet No. 139 Fifth Revised Sheet No. 139 : Effective

Superseding: Fourth Revised Sheet No. 139

GENERAL TERMS AND CONDITIONS

(Continued)

13.3 Pipeline Interconnect Allocation:

(a) An operational balancing agreement (OBA) is a contract between two

parties which specifies the procedures to manage operating variances

at an interconnect. At any point of interconnection with another

pipeline, COMPANY may agree, on a nondiscriminatory basis, to enter

into a form of OBA (herein called a "Pipeline

Balancing Agreement") with such pipeline operator

in lieu of the allocation provisions of Section 13.1

and/or Section 13.2 above, as applicable, if the following

conditions are met:

(i) the pipeline operator is creditworthy or provides one of the

alternate forms of credit support set forth in Section 2.1(d)

herein;

(ii) the pipeline operator maintains dispatching personnel on a 24-

hour basis, seven days a week;

(iii) the point of interconnection is equipped with electronic

measurement equipment and remote flow control; and

(iv) COMPANY and pipeline operator enter into a Pipeline Balancing

Agreement in the form set forth in this tariff, or such other

form as the parties mutually agree to in a nondiscriminatory

manner, which shall provide, inter alia, for the allocation

of scheduled nominations at the point of interconnect

with any daily variance between scheduled nominations and

metered flow at such point to be resolved by COMPANY and the

pipeline operator under the terms of the Pipeline Balancing

Agreement.

(b) COMPANY shall maintain on SoNet a list of all pipeline interconnects

at which a Pipeline Balancing Agreement is in effect.

13.4 Application of NAESB Standards' Timelines

The NAESB timelines applicable to standard NAESB predetermined allocation

(PDA) methods shall also apply to any additional PDA methods offered by

COMPANY pursuant to the provisions of this Section 13.

13.5 Time Limit on Disputes of Allocations:

If SHIPPER disputes any of the allocations of gas made to its agreements

with COMPANY under this Section 13, SHIPPER must notify COMPANY of such

dispute, with supporting documentation, no later than 6 months following

the month of service being disputed. COMPANY shall have 3 months within

which to resolve or rebut the dispute. These time limits do not apply

in the case of deliberate omission or misrepresentation or mutual mistake

of fact. The parties' other statutory or contractual rights shall

not be diminished by this provision.