Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 09/01/2003, Docket: RP00-476-005, Status: Effective

Fourth Revised Sheet No. 239 Fourth Revised Sheet No. 239 : Effective

Superseding: 1st Rev. Second Revised Sheet No. 239

GENERAL TERMS AND CONDITIONS

APPENDIX D

(Continued)

ARTICLE I

BALANCING TERMS AND CONDITIONS

1.1 Subject to the terms and provisions of this Agreement, the parties agree that to

the extent Company is able to confirm the nominations made by Seller for receipt

of gas into its Supply Pool, the quantities of gas nominated by Seller for delivery

from its Supply Pool to various Service Agreements shall be deemed to have been

delivered to said Service Agreements by Seller. The aggregate quantity of gas

Seller can nominate for receipt into and delivery out of its Supply Pool on any day

shall not exceed the confirmed quantity. To the extent the quantities of gas

actually received and allocated at the Receipt Points to Seller's Supply Pool

each day are less than or greater than the daily quantities of gas

nominated by Seller at said Receipt Points, such variance shall constitute an

imbalance between Seller and Company under the terms of this Agreement ("Imbalance").

1.2 The parties recognize that this Agreement is to be used to account for the

inadvertent over-deliveries and under-deliveries for Seller's account which may

occur on a daily basis relative to the quantities nominated under the Service

Agreements for purchase from Seller's Supply Pool on a daily and monthly basis and/or to

enable Title Transfer Tracking Service Providers to conduct TTT services on Company's system.

Accordingly, Seller recognizes and agrees that this Agreement in no manner

waives Seller's obligation to use its best efforts to ensure that the quantities of gas

received into Seller's Supply Pool remain in balance on a daily and monthly basis

with those quantities nominated for purchase from Seller's Supply Pool.