Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 11/01/1994, Docket: RP94-387-001, Status: Effective

Second Revised Sheet No. 212C Second Revised Sheet No. 212C : Effective

Superseding: First Revised Sheet No. 212c

GENERAL TERMS AND CONDITIONS

(Continued)

(4) Any other costs which the Commission orders to be (i) allocated or

assigned to SHIPPER, or (ii) paid by SHIPPER, as a result of the

direct delivery connection.

(g) After the SHIPPER requesting the direct delivery connection executes an

interconnection agreement agreeing to pay or reimburse COMPANY in full

for the costs set out in Sections 36(f)(1), (2), (3), and (4), as applicable, and

COMPANY has received all necessary regulatory authorizations to construct,

install, and operate the direct delivery connection facilities, COMPANY shall

commence construction of the new direct delivery connection in accordance

with the terms of such agreement and regulatory authorizations.

37. VERIFICATION OF DELIVERIES UNDER SMALL SHIPPER AGREEMENTS

37.1 Purpose:

This provision sets forth the requirements which must be met by a SHIPPER

who pays a Small Shipper Charge for firm transportation service under

Section 3(c) of Rate Schedules FT or FT-NN (hereinafter referred to as a

"Small Shipper") when deliveries under other transportation agreements

are made by COMPANY to the Small Shipper's Delivery Point on any day.

This provision also establishes the billing consequences for SHIPPERS

at the Small Shipper's Delivery Point if the requirements set forth

herein are not met.

37.2 Deliveries to Small Shipper Delivery Points:

(a) Except as set forth in Section 37.2(b) below, a Small Shipper

must utilize its firm transportation agreement(s) subject to

a Small Shipper Charge (hereinafter referred to as "Small Shipper

Agreement") for having gas delivered to its Delivery Point(s)

thereunder on any day prior to using, or causing to be used by

another SHIPPER for delivery to the Small Shipper, any other type of

transportation agreement.

(b) If a Small Shipper has both a Small Shipper Agreement and an FT and/or

FT-NN Service Agreement under which it pays a Reservation Charge, the

Small Shipper may utilize the latter type of agreement(s), at its

option, prior to utilizing its Small Shipper Agreement.

SHIPPER to contract with COMPANY for the transportation of gas on any

day to the Small Shipper Delivery Point on behalf of an industrial

customer located behind such point.