Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 07/30/2008, Docket: RP09-288-000, Status: Effective

Fifth Revised Sheet No. 170 Fifth Revised Sheet No. 170

Superseding: Fourth Revised Sheet No. 170

GENERAL TERMS AND CONDITIONS

(Continued)

22.4 RELEASING SHIPPER'S and ACQUIRING SHIPPER'S Obligations:

(a) ACQUIRING SHIPPER:

To bid on capacity offered under one of the types of Temporary Releases set

forth in Section 22.3(b)or(c) above, the bidder must be preapproved for

credit and have an executed Firm Transportation or Firm Storage Service

Agreement, as applicable, (sometimes referred to herein as "Service

Agreement"), as more particularly set forth in Section 22.6(e) below. To

bid on capacity for a Permanent Release under Section 22.3(a) above, the

bidder must be preapproved for credit and have submitted an executed

Transportation or Storage Service Request Form, as more particularly set

forth in Section 22.6(e) below. COMPANY will not award capacity release

offers to SHIPPER until and unless SHIPPER meets COMPANY's creditworthiness

requirements applicable to all services that it receives from COMPANY,

including the service requested by the capacity release. Any bid submitted

and not withdrawn by the end of the bid period will legally bind the bidder

to the terms of the bid if COMPANY chooses such bid as the "best bid" under

Section 22.6(h) below. Once a bid on an Offer for a Permanent Release of

capacity under Section 22.3(a) is accepted, the ACQUIRING SHIPPER shall

execute an amendment to its Service Agreement with the COMPANY to utilize

the capacity under the terms set forth in the accepted bid and the terms

and conditions of the COMPANY'S FERC Gas Tariff applicable to the capacity

released. Before an ACQUIRING SHIPPER may execute an amended Service

Agreement with COMPANY to utilize released firm capacity, the ACQUIRING

SHIPPER must satisfy all of the COMPANY'S requirements relating to the Rate

Schedule under which the capacity has been released. Once a bid on an

Offer for a Temporary Release of capacity under Section 22.3(b) or (c) is

determined to be the best bid, COMPANY will post on SoNet Premier and email

information to the ACQUIRING SHIPPER reflecting the terms of the bid

("Capacity Release Transaction"), and the ACQUIRING SHIPPER agrees that the

terms of the Capacity Release Transaction shall be binding and no further

execution thereof shall be required. After the issuance of the Capacity

Release Transaction by COMPANY, the ACQUIRING SHIPPER shall become an

existing SHIPPER with separate firm contract quantities like any other

SHIPPER and is subject to the applicable provisions of COMPANY'S billing

and payment and operational provisions. Once the ACQUIRING SHIPPER

electronically executes its amended Service Agreement resulting from a

Permanent Release, the ACQUIRING SHIPPER becomes an existing SHIPPER with

separate firm contract quantities like any other SHIPPER and is subject to

the applicable provisions of COMPANY'S FERC Gas Tariff, including but not

limited to COMPANY'S billing and payment and operational provisions.

(b) RELEASING SHIPPER: The RELEASING SHIPPER shall remain

fully liable on its existing Service Agreement with the COMPANY for

the payment of all reservation charges for the contract quantity which

has not been released permanently, associated surcharges, fixed

charges, and direct bills owing to the COMPANY each month under

the existing Service Agreement, as well as for services performed for

or penalties