Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 09/22/2004, Docket: RP04-494-000, Status: Effective

Second Revised Sheet No. 139.01 Second Revised Sheet No. 139.01 : Effective

Superseding: First Revised Sheet No. 139.01

GENERAL TERMS AND CONDITIONS

(Continued)

13.6 Any quantities received into COMPANY'S system at a

receipt point or delivered from COMPANY'S system at a

delivery point on a day when there is no scheduled

nomination in effect at the point ("Unscheduled Quantities")

shall be allocated to the operator of the interconnect

facilities at the applicable point. Company shall allocate

these volumes to the operators pooling or transportation

contract. If no contract is in effect, allocations made

to operator shall be deemed to be performed under Rate

Schedule IT. Any Unscheduled Quantities allocated pursuant

to this provision shall be treated in the same manner and

have all corresponding obligations as scheduled gas for

all purposes under this Tariff, including, but not limited

to, assessing transportation charges, surcharges, cashout

premiums, and penalties.

13.7 Zone Matrix Calculation: For purposes of determining the Transportation

Charge applicable to each Dth of gas delivered for SHIPPER'S account under its

Service Agreements as determined in Section 13.2(f)(i) above, COMPANY shall

match SHIPPER'S receipts to SHIPPER'S deliveries in the following manner by

category. Receipts shall first be matched to deliveries allocated to SHIPPER'S

IT Service Agreement. Receipts shall then be matched to deliveries allocated to

the following service types, as applicable, under SHIPPER'S Firm Transportation

Service Agreement, not to exceed the corresponding total Transportation Demand:

small shipper services, overrun, and then all other firm services. Within each

of these categories, except as provided below for firm services charged at a

small shipper rate, COMPANY shall match (i) intrazone receipts and deliveries,

then (ii) receipts to forward haul deliveries (i.e. lowest to highest zone) in

the order of lowest rate, and (iii) any remaining receipts to remaining

deliveries in the order of lowest rate. If SHIPPER'S allocated deliveries

exceed its allocated receipts, such excess deliveries are deemed to be sourced

from the farthest receipt zone (i.e. production area). COMPANY shall calculate

transportation charges for small shipper services based on deliveries within

each delivery zone and shall match those deliveries with receipts from the

farthest receipt zone (i.e. production area).