Southern Natural Gas Company

Seventh Revised Volume No. 1

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

Fourth Revised Sheet No. 150 Fourth Revised Sheet No. 150 : Effective

Superseding: Third Revised Sheet No. 150

GENERAL TERMS AND CONDITIONS

(Continued)

Section 16.2(d)(2) (continued)

All interruptible services for which a customer is paying less than the maximum

rate at the time capacity allocation is performed pursuant to this

Section 16.2(d) shall be limited prior to any interruptible

service that is not being so discounted. Services paying a lower rate

will be limited prior to services paying a higher rate. Discounted

services paying an equal rate will be limited on a pro rata basis

based on confirmed nominations. In the event a SHIPPER paying a

rate, which is less than the maximum rate under its IT Service Agreement,

elects to pay the maximum rate applicable to its IT service on any day when

interruptible transportation capacity is being allocated less

than the IT demand, SHIPPER'S IT service will be queued up with

other maximum rate IT services. SHIPPER must make such

election by the nomination deadline for the day IT capacity is

being limited or allocated.

(3) Park and Loan Service as further set forth in Section 5.1 of Rate Schedule PAL.

16.3 Gas Sales Allocations:

(a) If the COMPANY experiences a deficiency in its gas supplies and

cannot deliver the full quantity of gas demanded on any day by its

sales customers up to the customers' total firm contract quantities with

the COMPANY, the allocation of gas to each gas sales customer shall

be made in accordance with this Section 16.3.

(b) Gas sales allocation orders shall be made by the COMPANY based on

the ratio of each sales customer's firm sales contract quantity to the

total sales contract quantities under all of the COMPANY'S firm gas

sales contracts. Each customer shall be