Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 01/09/2009, Docket: RP09-147-000, Status: Effective

Sixth Revised Sheet No. 142A Sixth Revised Sheet No. 142A

Superseding: Fifth Revised Sheet No. 142A

GENERAL TERMS AND CONDITIONS

(Continued)

Section 14.1(f)(1) (continued)

the SHIPPER sending the notice, the name of the other SHIPPER

agreeing to the trade, the volume (in Dth's) of the SHIPPER'S

Net Monthly Imbalance that is to be traded, a certification

that SHIPPER has taken all steps necessary to effect the trade

with the other party, and, if applicable, confirmation of credit-

worthiness. Each SHIPPER to the trade agrees to indemnify and

hold COMPANY harmless from and against any claims that either

SHIPPER may have against the other arising out of or as a result

of the trade. Upon receipt of the Imbalance Trade Confirmation,

COMPANY shall send to each Shipper a notice of receipt ("Imbalance

Trade Notification") no later than 12:00 noon CCT of the next

business day. Imbalances trades are considered final when

confirmed by the confirming SHIPPER and effectuated by COMPANY.

(2) SHIPPER may elect to use gas in its Storage Inventory or the Storage

Inventory of a third party under a CSS Service Agreement or ISS Service

Agreement or its available storage capacity under its own or a third

party's CSS Service Agreement or ISS Service Agreement to remedy all or

any portion of its Net Monthly Imbalance; and SHIPPER shall not be

obligated to pay to the COMPANY the applicable injection or withdrawal fee

set forth under Rate Schedule CSS or Rate Schedule ISS for the amount of

gas in dth that SHIPPER elects to use to remedy its Net Monthly Imbalance.

To exercise this election to use gas in storage or storage capacity to

remedy a Net Monthly Imbalance, SHIPPER must notify COMPANY'S Customer

Services Department in writing, by e-mail or electronically via SoNet

Premier on the form provided by COMPANY by the close of the Trading Period

established under Section 14.1(f)(1) above for the month in which the

imbalance is incurred if SHIPPER is using storage inventory or storage

capacity on Southern's system to resolve its Net Monthly Imbalance. In

order for SHIPPER to use a third party's CSS or ISS Service Agreement to

resolve SHIPPER's Net Monthly Imbalance, such third party must confirm

said use by SHIPPER by the deadline set forth above to exercise the

election.

(3) Effective with the month in which the Stipulation and Agreement in Docket

No. RP04-523 becomes effective, SHIPPER may elect to use gas in its

Storage Inventory or available capacity in a third party storage facility,

provided that such third party storage facility is directly connected to

COMPANY's system, to remedy that portion of SHIPPER's Net Monthly

Imbalance or a third party SHIPPER's Net Monthly Imbalance designated by

SHIPPER electronically via e-mail or SoNet Premier that is equal to or

less than a Net Imbalance Percentage of 5%. To exercise this election,

SHIPPER must notify COMPANY's Customer Services Department in writing, by

e-mail or electronically via SoNet Premier on the form provided by COMPANY

within the same time period described above in subsection (2) for on-

system storage elections. In order for SHIPPER's election to be valid, the

third party storage facility operator and third party SHIPPER, if

applicable, must confirm acceptance of SHIPPER's election by the end of

the election period and, as part of such confirmation, COMPANY and such

storage facility operator must agree upon a method and the timing of

resolving said imbalance; provided, however, COMPANY's agreement will not

be unreasonably withheld.

(4) COMPANY shall not calculate SHIPPER'S Net Imbalance Percentage

under Section 14.1(a) above for a month until all trades and

storage resolutions for such month are completed pursuant to

this Section 14.1(f).