Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 09/01/2009, Docket: RP09-427-002, Status: Effective

Second Revised Sheet No. 162 Second Revised Sheet No. 162

Superseding: Original Sheet No. 162

GENERAL TERMS AND CONDITIONS

(Continued)

21. ASSIGNMENT OF FIRM CAPACITY ON UPSTREAM PIPELINES

21.1 Purpose:

The purpose of Section 21 of the General Terms and Conditions is to establish the procedures for the

COMPANY, and for a SHIPPER, to release firm capacity pursuant to Section 284.242 of the Commission's

Regulations.

21.2 COMPANY'S Firm Transportation Capacity on Upstream Pipelines:

(a) In accordance with Section 284.242 of the Commission's Regulations, the COMPANY shall make

available for assignment to its SHIPPERS and other parties the COMPANY'S firm transportation

capacity rights on upstream pipelines.

(b) The COMPANY will post on SoNet:

(1) the upstream pipelines on which the COMPANY holds capacity pursuant to a firm

transportation contract;

(2) the contract quantity of each firm transportation contract and the rate the COMPANY pays

for the reserved capacity;

(3) the remaining primary term associated with each firm transportation contract.

(4) the receipt point(s) and delivery point(s) through which the COMPANY may transport

natural gas under each firm transportation contract.

under the terms and conditions posted by the COMPANY pursuant to Section 21.2(b) above shall

notify the COMPANY electronically through SoNet or in writing and provide proof of

creditworthiness within the time specified by the COMPANY in its notice. The COMPANY will

provide all offers and credit information to the upstream pipeline. A party who accepts

assignment of all or part of the COMPANY'S firm transportation capacity rights shall contract

directly with the upstream pipeline for the firm capacity assigned, under the terms and

conditions existing in the COMPANY'S firm transportation contract with the upstream pipeline,

including the terms and conditions thereunder related to assignment, unless the upstream

pipeline agrees otherwise. Thereafter, the COMPANY shall be relieved of all contractual

obligations with the upstream pipeline with respect to the capacity assigned. The COMPANY shall

not be responsible to indemnify against any loss, costs or expenses associated with the

assignee's failure to perform all obligations under the terms of its contract with the upstream

pipeline and the assignee shall agree to hold COMPANY harmless therefrom.

(d) If the COMPANY receives competing offers from parties which exceed the upstream capacity

that is actually available to the COMPANY under the terms of a specific firm transportation

contract, the COMPANY shall assign the capacity available first to firm SHIPPERS requesting

capacity on a pro rata basis