Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 04/01/1995, Docket: RP92-134-014, Status: Effective

First Rev. Second Rev. Sheet No. 205 First Rev. Second Rev. Sheet No. 205 : Effective

Superseding: First Revised Sheet No. 205

GENERAL TERMS AND CONDITIONS

(Continued)

33. TAKE-OR-PAY BUY-OUT & BUY-DOWN RECOVERY MECHANISM

33.1 Purpose:

In order to recover the buy-out and buy-down costs incurred by COMPANY,

i.e., costs incurred by COMPANY directly or indirectly to extinguish outstand-

ing take-or-pay exposure under existing contracts, or to terminate the

contracts, or to reform the price, volume or other pertinent economic terms

of the contracts, consistent with the provisions of Section 2.104 of the Com-

mission's Regulations governing the recovery of such costs, this Section 33 of

the General Terms and Conditions is established to be applicable to all of

COMPANY'S former rate schedules for the sale of gas for resale and all rate

schedules for the transportation of gas contained in Volume No. 1 and Vol-

ume No. 2 of COMPANY'S FERC Gas Tariff.